Action Plan for Electro-Motive diesels

Electro-Motive Division (EMD) leads a group of worldwide partners in a global business providing value-creating products and services for railroads, marine, and power generation industries. They earn their customers’ enthusiasm through continuous improvement driven by the integrity, teamwork and innovation of their people and partners. Internal Public Relations Action Plan For more than half a century, Electro-Motive diesels have hauled freight and passengers, powered ships, and generated electricity for over seventy countries around the globe.

EMD products are built to last, and to outperform their competition. EMD products have performed in nearly every imaginable condition – from the sands of the Sahara, to the heights of the Andes, to the demanding grades of the Powder River Basin (“Gm Electro-Motive”). With that performance, they have not only helped their customers achieve their goals, but they have earned a reputation for quality, service and innovation. Today, EMD is the world’s largest builder of diesel-electric locomotives for all commercial railroad applications: intercity passenger, commuter, freight, switching, industrial and mining.

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The company’s headquarters, engineering facilities and parts-manufacturing operations are located in LaGrange, Illinois, just west of Chicago. Final assembly is conducted at the state-of-the-art plant at London, Ontario, from which EMD products are exported to customers around the world (“Gm Electro-Motive”). Starting in September of 2003, EMD had disclosed information to their organization that they were in discussion with an investor group led by Greenbrier Equity Group and Berkshire Partners of Boston to sell EMD.

The possible sale of the locomotive builder to an investment group, not a manufacturer, had sparked worry among Union workers (“Is EMD up,” 2003). In London, Ontario, this prompted a city counselor to ask for quick action from city hall. After numerous calls from anxious workers and business leaders, the mayor of London Economic Development Corporation investigated the possible sale and met with the new owners to ensure jobs stayed in London (McCracken, 2004). Electro-Motive quieted the rumors of potential sale by stating there was nothing to announce any time soon on the possibility of the sale.

This did not settle well with the employees of EMD. Knowing job uncertainty and drastic changes are what the future may bring. EMD workers wanted to know what was happening to their company. By December 2003 negotiations with Greenbrier Equity Group quieted down, as Bombardier was now interested in merging their locomotive business with EMD. This rumor took place right before the two-week holiday shutdown. A lot of rumors passed through saying EMD would be sold and a gone at the first of the year.

Bombardier had different interests; they wanted to purchase EMD to utilize their engine facility. This is where the engines are built, dynode, tested, and shipped. Shortly after the new-year all negotiation talks dwindled and the deal with Bombardier fell through. In May of 2004 Caterpillar Inc. started discussions with EMD inquiring about a possible company merger. Caterpillar having one of the largest local unions, scared EMD hourly personnel. The Canadian Auto Workers union did not want GM Electro-Motive sold to the heavy equipment maker, because of Caterpillar’s history of labor problems.

Caterpillar has had a bad reputation for meeting the demands of their union workers, and always faulting on their contracts. The CAW and UAW were not pleased to hear that Caterpillar was a potential owner (McCracken, 2004). Towards the end of July 2004 discussions with Caterpillar ended, due to the complexity of Union negotiations. They had proceeded to meet with the United Auto Works (UAW) officials to discuss future contracts for EMD hourly personnel. Neither side could settle on anything close to what they wanted.

Union negotiations have always been the last stop for companies purchasing EMD. In October 2004 it was announced to EMD personnel that GM was still in negotiations with Greenbrier Equity Group. GM had moved on to the final stages of the potential sale. There still were many details that needed to be worked out, which more likely than not result in Greenbrier backing out of the purchase. Budgets, inventories, labor relations, and union negotiations are a few things still left that GM has yet to disclose with Greenbrier. The morale of EMD has plummeted the last twelve to eighteen months.

Knowing that their company is for sale and that they will not longer belong to GM has a lot of personnel worried. Job security, pensions and healthcare are all concerns for employees, especially ones that have only a few years remaining until retirement. Internal relations has tried to keep a positive morale among works, but has found it difficult with all of the rumors and negativity towards GM. EMD public relations has stated to their employees that to insure the value and success of their business, they must keep working hard and diligent as always. The success of EMD depends on the efforts of their people.

EMD engages in a lifelong relationship with its customers, and offers a complete line of value-added services to enhance the performance of its products. The equipment management and maintenance services offered by EMD, set industry standards for service excellence. Through technological advancements and customer-focused solutions, EMD customers achieve new levels of availability, reliability and product utilization. Public relations at EMD has done a poor job of keeping their employees updated with current information. There have been a lot of talks with outside companies and rumors flying through their organization.

They have not addressed all the issues or concern their employee’s questions. When statements and rumors are passed through the media it is scary for employees to see that their PR does not respond to them. As an employee, you like knowing that your company has a response to everything that is being said, and that they are backing their employees. Due to the progress of the negotiations with Greenbrier Equity Group, EMD PR has just acknowledged the potential sale. Internal PR has addressed some of the issue raised by their employees, yet they do not give answers to anything.

PR addressed the potential sale of EMD for the last 18 months, and has informed its employees that GM is still discussing the sale of EMD with prospective buyers. Although rumors have been said that EMD has already been bought, they clearly stated that no deal has been finalized. In addition to the statements of the sale, PR also addressed internal issues such as job security, pensions and healthcare. Since these are the main concerns of their employees, people want to know what will happen to their years of service at EMD and what is in store for the future.

PR also made known that the interest of their employees is most important, during these discussions. PR has ensured its employees that when management finds out any specifics pertaining to the sale; they will inform their employees promptly. Through all of these tough times, EMD still stands behind listening to and supporting customers, pursuing continuous improvement, and building on a reputation for manufacturing excellence. EMD and its employees look forward to what the future hold for them, whether it be innovation or service to the fast-changing global railroad and power products industries EMD sill be there leading the way.

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