Bridgetton Management Case Study: Bridgeton Plant
To: Bridgeton Management
The ACF plant had cutbacks throughout the 80s as a result of stiff competition caused by foreign competitors entering a market that was dominated by the US auto parts suppliers.
As a result of declining market share, ACF is not only in competition with other suppliers but also other Bridgeton plants.
The gross profit is declining due to increased costs in direct labor and direct material since 1987. Direct materials cost increased due to the high cost of steel in producing the manifolds. Direct labor cost increased due to the plant using people that were in the retained job pool by the union. More overhead cost was being allocated to remaining products when muffler/exhaust and oil pans were outsourced; as a result
The ACF plant had cutbacks throughout the 80s as a result of stiff competition caused by foreign competitors entering a market that was dominated by the US auto parts suppliers.
As a result of declining market share, ACF is not only in competition with other suppliers but also other Bridgeton plants.
The gross profit is declining due to increased costs in direct labor and direct material since 1987. Direct materials cost increased due to the high cost of steel in producing the manifolds. Direct labor cost increased due to the plant using people that were in the retained job pool by the union. More overhead cost was being allocated to remaining products when muffler/exhaust and oil pans were outsourced; as a result