Can you help me with this question on ethics?

Question

Shokun Steel Company owns many steel plants.One of its plants is much older than others.Equipment at that plant is outdated and inefficient and the costs of production at that plant is twice as high as the others. The company cannot raise the price of steel because of competition both domestic and international. The plant employs more than 1 thousand workers in a part of Pennsylvania which has a population of 45,000. They are contemplating on whether to close the plant. What factors should the firm consider on making decisions? Will the firm violate any ethical duties if they close?

Answer 1

It really depends on whether the company honors the workers with proper notice, severence and pensions.

The tendency in American business during these republican years is to leave the workers high and dry while giving the plant CEO's huge parting benefits.

This is unethical.

But if they honor their committment and make an effort to help the displaced workers, then at least they are trying at ethics.

Answer 2

It depends on how you look at it. If the company is a publicly held, they have an obligation to be as profitable as possible to pay dividends to the stock holders. That may not seem fair to the workers but I'm sure that is what the stock holders expect. That's why they invested their money in the company in the first place.

On the other hand, from what you have described, the company has been short sighted in not investing more in updated equipment. Obviously you can't keep taking profits from a company without investing some of it back into the company to keep it productive.

Obviously it is a more complicated issue than it first appears. One thing I'm sure of is that the workers will probably get the short end of the stick when it's all over.