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Integrity, Objectivity, and Ethics at the Hershey Company You are the CFO at Hershey Company, Hershey, PA. You need union concessions in order to stay in business. You must determine if the management of The Hershey Company should asked union workers in two of its highest cost Pennsylvania plants to accept higher health insurance premiums and take a wage cut. The workers portion of the insurance cost would double from 6% of the premium to 12%. In addition, workers hired after January 2000 would have their hourly wages cut by $4, which would be partially offset by a 2% annual raise. Management says that the plants need to be more cost competitive. Management has indicated that if the workers accept the proposal, the company would invest $30 million to modernize the plants and move future projects to the plants. Another issue is Hershey management has refused, however, to guarantee more work at the plants even if the workers approve the proposal. If the workers reject the proposal, management implies that it would move future projects to other plants and that layoffs might be forthcoming. Analyze the ethics of this case. Do you consider managements actions ethical? There are 2,700 union workers at these two plants. Source: Susan Govzdas, Hershey to Cut Jobs or Wages, Central Penn Business Journal, September 24, 2004. Full of questions, you are looking for help to sort out the quantitative and qualitative issues involved in this potential expansion.

Discussion Response Respond to the following in your initial post:

a. Using as much of the information as possible, analysis what is being asked of the 2,700 workers.

b. Review the numbers and do an incremental analysis of the possible move option you face.

c. What should you do about approaching the union? Use the numbers to justify your answer.

d. What qualitative issues should concern you? How much impact do you feel these should have on her decision? Why?

e. Is this an ethical choice?

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