Facilitating the shut-down of a factory of a major US MNC
The Situation
Facing declining transformer sales, X-PM India's client aimed to shutter a major factory in India, prompting negotiations with over 600 workers. The challenge intensified with political and union complexities, as workers demanded compensation equivalent to 10 years of salary each.
This scenario was marked by ambiguity, dynamic factors, and varied strategic options, creating a complex landscape with multiple stakeholders.
The Solution
X-PM India strategically deployed a dynamic, seasoned manager skilled in negotiations with unions and local government. Addressing issues such as industrial contamination, the manager formulated an action plan for effective implementation.
Considering alternatives, the manager explored selling the factory instead of closure, engaging with two potential buyers. To maximize bargaining power, parallel activities were pursued—simultaneously closing the facility while negotiating with prospective buyers.
The Result
Despite the union rejecting a generous VRS package, X-PM India's manager advocated accepting the buyer's offer. Engaging with the government department, the manager emphasized the mutual interest in facilitating the lease transfer to the buyer, ensuring continued operation and regional employment.
Leading negotiations for the sale agreement, X-PM India's manager collaborated with the client's in-house legal representative and two external legal firms. This strategic legal approach contributed significantly to the successful resolution of this intricate situation.
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