GUMDROP NORTHERN CASE

Gumdrop Northern Case

Abstract

In this study we try to explore the Gumdrop Northern Case in a holistic context. The main focus of the research is on Gumdrop Northern Case and its ethical issues. The research also analyzes many aspects of Gumdrop Northern Case and has presented the memorandum regarding the unethical issues to the CEO of the firm.

Table of Contents

Abstract2

Background of the Case4

Memorandum8

A. The Problem8

B. Ethical Issue #1:9

C. Ethical Issue #2:10

D. Ethical Issue #3:12

E. Resolution:14

References15

Gumdrop Northern Case

Background of the Case

Gumdrop Northern was a long term military contractor and munitions manufacturer, with annual revenues of $500 billion. The company employed 105 workers each highly paid UAW technicians and mechanics. Gumdrop Northern manufactured body armor and armored vehicles for the United States military. Contrary to international law and treaties, it also manufactured land mines exporting them to Afghanistan and Iran, its best foreign customers. More than half of its profits derived from these clandestine operations.

All of Gumdrop Northern's products had problems. Although paid handsomely for its body armor and armored vehicles, the materials used in manufacturing were substandard. The body armor did not protect service members from most antipersonnel ammunition. The simple addition of a standard issue flak jacket would have prevented most injuries, but Gumdrop did not tell the military because it feared it would lose its contract. In addition its armored vehicles, though quite strong and sturdy on the sides and top had only a thin sheet of steel on their undersides, making them especially vulnerable to IED (Improvised Explosive Device) explosions. The land mines it sold to the Taliban in Afghanistan and to the Iranian government were themselves defective. Many of those who attempted to plant the mines were themselves killed in the process because of the use of faulty switches. Most of the mines' victims however, were children and soldiers.

As the US military began to understand the problems with the body armor and armored vehicles it had purchased from Gumdrop Northern, Department of Justice lawyers became involved and the families of injured or killed US service members consulted attorneys. Gumdrop's corporate leaders were themselves now looking down the barrels of criminal prosecution, and classes of plaintiffs were forming and growing quickly. The Gumdrop board knew the company's days were numbered. Although it could afford to pay the class-action plaintiffs and its top executives, if imprisoned, could be replaced, the board came to the conclusion that its fiduciary duties to shareholders would best be fulfilled by leaving its production facilities in America and establishing a factory in Argentina, a country that did not extradite to the United States, and Colombia, where union organizing is not a problem because unionists are regularly murdered. But first Gumdrop had to try to get out from under the potential legal liabilities both to the families of service members who had been injured or killed as a result of Gumdrop products, and to the workers in its American plant who are protected by a collective bargaining agreement and by US labor ...