Spirituality and Leadership
PRESENTED BY:
Gabrielle Bradley, Craig Collier, Tim Harris, Tabitha Peace, & Tim Valentine

AMBA 5230- Leadership
December 12, 2008

CASE STUDY: CLOSURE OF STROH’S PLANT UPON MERGER

When Stroh’s Brewery of Detroit acquired Schlitz Brewing Company in 1982, it got five breweries more modern than its own Detroit plant that had been operating for over seventy years. Three years later, Stroh’s decided to close the Detroit brewery with its 1,100 jobs, sixty of which were managerial. Eighty-five percent of the hourly employees and 22 percent of the salaried employees had worked at the plant for more than twenty years.

The president of Stroh’s Peter Stroh, was keenly aware of the impact the closure would have. Unemployment in Detroit was a staggering 9 percent. To lesson the impact on employees and the sagging Detroit economy, Stroh’s announced the closure four months before the actual shutdown.

Peter Stroh worked with other CEOs in the Detroit area to find jobs for the displaced workers. Stroh’s and the brewery workers’ union established an outplacement program, Stroh’s spent $1.5 million on it, while state and local governments contributed $600,000. Ron Cupp, manager of corporate personnel at Stroh’s stated:

“The people who had come to work here came to stay. It was very tough to have to let them go. We wanted to develop an aggressive program that would assist these people in a new beginning-be that a new career, their own business, retirement, or whatever their goal might be. In short, we wanted every employee to feel that Stroh’s was a good place to work while it was open and a good company to have been associated with after it closed.”

The outplacement program offered:

  • Orientation sessions to explain the overall concept and give employees ample opportunities to ask questions;
  • Individual skills testing and assessment;
  • Development of an individualized job search strategy;
  • Individualized job-search counseling;
  • Job-search skills workshops;
  • Counseling sessions on financial planning, retirement planning, relocation, and starting a new business;
  • Psychological counseling;
  • A research library, free phones, and secretarial facilities; and
  • Extended health and severance benefits.

In just slightly over a year, all of Stroh’s 125 salaried employees and 98 percent of the 655 hourly (unionized) employees had found other employment. The layoff and outplacement costs, including Stroh’s and government contributions, were $2000 per employee.