Question

EIC Case Study 1. You are an outside director of Crowler Inc., a manufacturer of kitchen and bathroom fixtures such as faucets, shower heads, and shower doors. Crowler has 29,0000 employees worldwide, including 18,000 manufacturing employees in the United States, Canada, and Mexico. Its headquarters is in Eden Praire, Minnesota. The CEO has proposed that Crowler increase its manufacturing capacity by adding a large facility to manufacture kitchen faucets, thereby increasing manufacturing employment by 3,000 workers. The board of directors is considering whether Crowler should expand its manufacturing facility in Brownsville, Texas, open a new factory in Indonesia, or close the Brownsville facility and move its current operations and the new operations to Indonesia. Using the Guidelines for Ethical Decision Making, what do you want to know before you make a decision? (CLO 1, 5 Marks) EIC 2. Hilda Forbes was the driver in an accident in which the front end of her car struck another vehicle. The driver's airbag did not deploy, and she sustained serious injuries. She later filed suit against the car's manufacturer because of the fa the airbag to deploy. The owner's manual for the car - a manual prepare manufacturer contained a statement that if a front-end co enough" the air bag would deploy. Although Forbes did not read the manual before buying the car, she told the salesman with whom she negotiated the purchased that a working air bag was important to her. The salesman informed Forbes of the gist of what the owner's manual said about the functioning air bag. In her lawsuit, Forbes presented the testimony of an expert witness who offered the opinion that the collision in which she was involved was severe enough to cause a properly functioning airbag to deploy. Under the circumstances, did the owner's manual's "hard enough" statement constitute an express warranty concerning the air bag? If so why? It not, why not? If the "hard enough" statement constituted an express warranty, was the warranty breached? (CLO 2, 5 Marks) d by the collision was "hard

Answer 1

1. As given in the case, Crowler Inc is planning expansion of its operation to embark on a larger market share. The company currently has 29,000 employees and among them 18,000 are based out of US, Canada and Mexico. For further expansion there is need of addition of capacity which can incorporate 3000 more workers. There are few proposals at hand : expand the current facility in Brownsville, start a new factory in Indonesia or close the Brownsville facility and move its current operations to Indonesia. Based on business logic, moving to a cheaper location would make more sense in the overall long term plan. Expanding the facility in Texas would be a costlier proposition. Starting a new plant in new country would need sufficient time and approvals but once the plant is up and running the costs saved can be significantly high. But if the board plans to close down the operations in Texas and move to Indonesia it would mean loss of jobs thousand of employees who are fully dependent on this company. It would a highly unethical approach to leave all the staff unemployed just to earn higher profit and cost savings. So based on the ethical consideration and business logic, it would be a better option to make the decision to continue the existing operation in Brownsville and start a new smaller facility in Indonesia.
2. The given case highlights the need for car manufactures to be more responsible while dealing with car safety. Hilda Forbes had clearly mentioned she needed a fully working airbag while buying the car. The car owners manual put down the clause that if the impact was hard enough the airbag would self deploy. The terms hard enough is not a legally valid term and there should a specific measurement which should be given with corresponds to the force which will force the car to deploy the airbag. In the given case, the car was in an accident during which airbag did not deploy and Hilda had to suffer from serious injuries due to the accident. If the airbag was set with a setting to deploy on minimal impact it would have helped Hilda and reduced the damage. The car owners manual stated that if impact was hard enough the airbag would deploy and this is an express warranty given in writing. If the car was in an accident which caused serious damage and injury we can assume that the accident and impact was hard enough for the airbag to have been auto deployed. But the air bag failed to open. This is directly in breach of the express warranty and Hilda Forbes has every right to sue toe car manufacturer for the damage caused to her.