The following analysis will discuss in detail the external environment of the auto industry and then transition

to examining the internal environment of General Motors which was a leading automobile manufacturer and at one time possessed a fifty percent market share. However, General Motors is now more renowned for their financial struggles and decreasing market share. General Motors does have internal strengths such as brand recognition and production efficiency, but their central problem that needs addressed is the negative perception that consumers have about their cars. The ecological factor that the Canadian Automobile Worker union was concerned about was the global warming concern and eco-efficient vehicles whereas the management of General Motors was concerned about the economic factors of increasing gas prices and gas shortages. As a result, the management of General Motors wanted to make a turnaround of their plants by making their cars more compact and this differentiation would make General Motors more competitive. Therefore, management needed to negotiate a new contract with the Canadian Automobile Workers union. The economic factors that affect General Motors are the business cycle, inflationary trends in pricing and fiscal policies. The business cycle states that when the economy is in a recession, the purchasing power of customers is lowered thereby restricting purchases to only what is absolutely necessary. Inflationary trends affect the price of goods and services. If inflation is severe wage and price controls may be imposed. This creates a deterrent which would make potential customers shy away from buying General Motors. Fiscal policies of government states new tax rates imposed by the government to General Motors have the effect of making them increase their selling prices thereby making what would probably be an affordable vehicle, beyond the reach of most customers. When imposed on individuals, it means less income and as a result less money to spending. The technological factors were producing alternative vehicles that use alternative energy sources such as the hydrogen car. Technology can also help businesses to meet the issues of sustainability. Sustainability is now a high priority and General Motors is keen to reduce waste and become more energy efficient. Using more efficient production systems can help reduce waste, recycle more and cut carbon emissions. For example there is innovative software which General Motors uses to monitor vehicle emissions. If drivers behave in an environmentally efficient way, they may benefit from fuel discounts. Systems like this help businesses save money through reduced fuel consumption while reducing emissions. Business decisions may be influenced by political factors. For example, recent wage cuts by the management of General Motors and increasing gas prices are affecting the auto sector. For employees this has meant making key decisions about how they intend to pursue their careers. This in turn has meant that management needed to review how they will meet the challenges of generating income. The management of General Motors identified that these changes in the landscape could have an impact on the number of potential employees with the skills and competencies that it requires. For example, it had to consider the affordability of gas for consumers and how this could influence long-term development opportunities within the company. The Canadian Automobile Workers union also engages in political activities on behalf of workers and have historically had ties to political parties such as the New Democratic Party. Much of the political work is done by central labor

bodies, organizations formed by Canadian Automobile Worker union to represent general concerns of workers. Central labor bodies, the most prominent of which is the Canadian Labor Congress, lobby for legislation that is in the interest of their members. They have supported legislation setting workers compensation and minimum standards for working conditions. The Canadian Automobile Worker union has pushed for medical coverage, unemployment insurance and health and safety legislation. In addition unions have supported community issues including human rights, pay equity and environmental standards. The role of the government on industrial relations is important as it sets the legal framework that General Motors operates in. Appropriate legislation recognizes the requirements of both General Motors and the Canadian Automobile Workers union. Both General Motors and the Canadian Automobile Workers union want to profit from each other but are also reliant on each other. Appropriate industrial relations laws should address any imbalance of power and give both groups an equal degree of control. Appropriate labour laws should not only allow collective bargaining but also facilitate employee participation in day to day workplace decisions. After all its the structure and framework of the employment relationship, which is governed by legislation that leads to good industrial relations. One of the main debates concerning industrial relations is the method used to organise and manage labour. Legal factors are important since workers are at a disadvantage in bargaining with employers because they have fewer options. Power in a market, depends upon how many options each party has and how badly harmed each party is when they fail to make a deal. General Motors has many potential employees that can be hired for most jobs. Usually it hurts an employee more to be fired than it hurts an employer for an employee to quit, and this means that employers have more power than workers. There is a way of rectifying this imbalance of power in the labor market. One way is for the government to impose regulations on labor contracts which in one way or another reduce the ability of employers to dictate the terms of an agreement. Examples include minimum wage rules, health and safety rules, rules governing overtime and working hours. The assumption behind all such rules is that left to their own devices employers would offer jobs at below the minimum wage, unsafe working conditions and excessive working hours to workers willing to accept such jobs. The rules are therefore designed to block employers from using their power advantage in labor markets to employ workers under the excluded conditions.

Lack of top level management or union support for non-traditional strategies will make it difficult for General Motors with adversarial dealings to transform their relationship and build the basic trust needed to support processes such as partnership. Similarly, alienation of front line managers or union officials can undermine the parties' efforts to expand the use of nontraditional strategies. Constituent attitudes also color politics and influence the choice of strategy, particularly among the Canadian Automobile Workers union who must act with the general will of their members. Engaging in a collaborative strategy can be risky for unions with dues paying members who favor a more confrontational approach with management. This is the case in

circumstances where a high percentage of employees pay dues and are active in the internal management and leadership of the union.General Motors labor management relations are based on mutual trust between labor and management. The concept of mutual trust between the Canadian Automobile Worker union and management of General Motors are improvements in the lives of employees realized through the prosperity of General Motors, and labor and management thus share the same goal of company prosperity as a common value; management will take into consideration stable employment and will continuously strive to improve working conditions and employees will cooperate with General Motors policies in order to promote the company's prosperity. Stable employment that avoids simple layoffs and terminations is key in the relationship of mutual trust between labor and management. In addition, the General Motors management system is based largely on bringing out the greatest extent of employee abilities, reasoning skills and creativity. The disposal of human resources, a major management asset, not only damages the relationship of trust, but also hinders the spontaneous display of ability by employees. A history of dealing with conflict in an adversarial manner will predispose General Motors and the Canadian Automobile Workers union to resolving disputes using competitive, traditional strategies. While the wear and tear of adversity may give rise to a desire for a more collaborative approach, negative baggage will constantly intrude on their good intentions, causing them to backslide into behaviors that have become ingrained. General Motors and the Canadian Automobile Worker union carry so much excess baggage that leadership on both sides has personalized disputes and remain fixated by making each other pay for perceived historic wrongs. Assessing blame is not an attribute associated with partnership or collaborative approaches to conflict resolution. It has been accurately said that labor relations is very much a human enterprise. Arguably, the success of a labor relations system depends more than anything else on how well the union and management representatives get along with each other and with their constituents. General Motors influences on the choices for engagement strategy include cultural, structural, and systemic factors. Cultural considerations may be manifested in management's attitude toward the union, the degree of union involvement in decision making, and the union's attitude about its own role in the organization. Non-traditional strategies, like partnership, are used with greater effect in organizations like General Motors with a strong history of union involvement in policy and decision-making. Perhaps this is because the parties' persistent engagements have shaped a more complete understanding of each others interests. The Canadian Automobile Workers union view themselves not only as the employees' voice with management but also as advocates for General Motors viability and agents for positive change. Collaborative strategies will not be as successful at General Motors where the Canadian Automobile Worker union have not been involved in substantial policy issues and labor relations interactions have been grievance focused. Likewise, General Motors with authoritarian management practices and low worker involvement will struggle with non-traditional approaches to labor interactions. In these situations it is likely that trust has not been nurtured and the Canadian Automobile Worker union has been perceived as management's natural adversary.