What do you think the benefits strategy of MMC has been? How does the benefits strategy match what you know about the organization?

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Assume that you are the Director of Employee Benefits for the Miller Manufacturing Company (MMC) and report to the Senior VP of Human Resources.

MMC was founded in 2000 and manufactures pumps, valves, and mechanical switches used throughout the world. MMC holds several patents developed by the founder, Harry Miller, who is the Chairman. The day-to-day operation of the business is run by Mr. Miller’s son, Harry Jr., who at age 46 has been the CEO for the past 8 years. MMC has been consistently profitable, with a 10-year compound growth rate in earnings per share of 22%. In 2010, the company went public, with 60% of the shares held by institutional investors. Six percent of the shares are held by the MMC Employee Stock Ownership Plan (ESOP) and the remaining 34% held by the Miller family. MMC has 1600 employees worldwide with all manufacturing done in two plants located in North Carolina (650 employees) and Ohio (400 employees). The corporate offices consist of 150 salaried exempt and non-exempt employees located at the Ohio plant. The corporate group includes the corporate staff and centralized sales and customer service functions. The balance of salaried employees (400) consists of sales and service representatives stationed worldwide. MMC has no unions at the present time. The current MMC benefits program is detailed later in this document. You have just returned from a meeting with the CEO and the Senior VP of Human Resources.
You have learned that MMC has been contacted by Olson-Young Enterprises, Inc. (OY), located in Santa Clara, California. OY was founded in 2008 by an electronics engineer who had previously worked for MMC in the early 2000s. OY manufactures electronic switches for pumps and valves. MMC does compete with OY, but OY has had problems in recent years with product quality and customer service. The market for electronic switches is growing at about 30% per year with most of the current market share held by one company in Japan and one company in Germany. OY is the only US manufacturer and has a 15% market share. OY has 300 employees; all are located in the US. Their sales and service outside of the US are handled by a network of non-employee, contracted representatives. OY is closely held, with only 10 shareholders.

  1. What do you think the benefits strategy of MMC has been? How does the benefits strategy match what you know about the organization?
  2. What do you think the benefits strategy of OY has been? How does the benefits strategy match what you learned about the company?
  3. Identify 3 benefit challenges and 3 benefit opportunities that are apparent when looking at combining the benefit plans at the two companies?
  4. Identify 3 benefit challenges and 3 benefit opportunities that would exist if the OY employees were to become covered by the MMC benefit program.
  5. Identify 3 benefit funding opportunities that are available at either company.
  6. Assume the acquisition of OY goes through. Select 3 benefit programs and provide your recommendation on harmonizing those programs for the combined company.
  7. Assume the acquisition of OY falls through. Identify 3 benefit changes that should be considered by MMC anyway?