A Tale of Two Fortunes

ABX Inc. is a large multinational conglomerate that operates 11 manufacturing facilities in

Canada, the United States and Mexico. Its line of business can broadly be described as the
manufacture of coating and adhesives products sold to the industrial and commercial
marketplaces throughout the world.
It has 4 locations in Canada. One is in Vancouver, British Columbia while a second smaller plant
is in Halifax, Nova Scotia. The other 2 plants are in Ontario with the largest plant that employs
about 350 people located in Cambridge and the second much smaller plant which employs
about 45 persons in Northern Ontario in North Bay.
All employees are full time. Employment at ABX is generally perceived by employees as a ‘great
place to work’ and this has been confirmed by recent Employee Engagement surveys. Very few
employees leave before retiring. ABX has worked hard to create and improve a strong culture
of engagement, honesty, integrity and trust with its employees over the past two or more
decades in the belief that this type of relationship supports better organizational outcomes for
employees, the communities that it serves and works within and other stakeholders. Employees
in the North Bay plant have demonstrated a strong commitment to the success of the plant.
Unfortunately, the product line produced by the location in North Bay has been under
increasing competitive pressure for the last decade. Sales volumes have decreased
substantially, and the plant and product line has lost progressively larger amounts over the last
two years. All efforts – and there have been many - to turn this situation around, have not
succeeded. The employees in North Bay have been active participants in most of these
turnaround efforts. Unfortunately, the situation has got worse with time. Management has
decided that it needs to close the plant within the next 6 months.
The other plants in Canada are doing well from a financial perspective. The plant in Cambridge
has introduced a new product offering recently and overall sales and profitability are growing
steadily. It has begun to hire a small number of new employees and has forecasted the need for
additional hiring over the next year.
Given ABXs’ core values and its belief regarding the value of maintaining an engaged workforce,
it has asked its HR team to work to make recommendations regarding the closure of the North
Bay plant.

1. What are your recommendations about how the downsizing and restructuring should
proceed?
2. There are no unions at any of the locations in Canada. How might your advice change if
unions were present?
 1. First, HR needs to hold a meeting to clearly communicate the plant's problems so that
hearsay will not be the order of the day.
2. Next, determine who will go and on what basis, possibly, those close to retiring could be let
go after debriefing
3. Considering the fact that the plant in Cambridge is doing very well and needs more hands
based on the introduction of new products, the HR could consider adding up some workers
from Northbay to Cambridge, that will be a process of reabsorbing the excess instead of hiring
new hands.
4. In the inplacement above, future work plans have to be determined in both Northbay and
Cambridge to allow for the absorption of the staff from Northbay.
5. For staff let go through early retirement, a program of counseling and benefits assistance
should be implemented immediately to help them cope with the new reality.
6. Follow-up evaluation should be done.