You are the CEO of a European auto maker group (Audi) that is planning to launch

Question

You are the CEO of a European auto maker group (Audi) that is planning to launch a subsidiary in Detroit Michigan (USA). The size of the European company is the equivalent of a fortune 500 company in the USA. You are asked to research the market and international management issues, including finding detailed data. You should consider the broad auto industry in the USA but you will also be asked to find detailed information about the major companies that operate in that industry.

5) Discuss some human resources issues that you may encounter as a European company in Detroit.

Explanation / Answer

Some of the Human resources issues that a European company may encounter in Detroit -

There could be distinctive cultural and operational issues. The cultural of European companies are quite different when compared to the culture of American firms. The U.S. isn’t very competitive with other countries when it comes to taking care of its workers.

In the U.S., workplace benefits like unemployment, maternity/paternity leave, and paid time off are part of the total compensation pie negotiated between employer and employee. In most cases, the responsibility to provide these necessary social benefits to workers falls to U.S. employers rather than the government. This is in contrast to social policy across Europe, which generally gives far more generous benefits than what is typical in the U.S. The benefits such as health insurance, paid vacation, paid sick days, and a retirement plan are some of the few benefits which are mandatory in European countries, unlike in US.

The maternity benefits are different in US and European countries. Companies in Europe give longest time leave for maternity. Whereas in US, the number of weeks is significantly lower. When it comes to paternity leave in US, many companies offer paid paternity leave to new fathers to help attract and retain talent. Whereas, paternity leave is still unregulated by the E.U., and entitlements vary dramatically.

There is no statutory annual leave entitlement in the U.S. The number of days offered is left as part of the compensation package negotiated between the employer and employee. The average number of paid vacation days for U.S. workers is 10 days, according to a report by the Center for Economic and Policy Research. Paid holiday entitlement in the E.U. is set at a minimum of four weeks (20 days) per year, exclusive of bank holidays.

The U.S. has no statutory mandate for paid sick leave, and the number of days offered is part of the compensation package negotiated between the employer and employee. Sick leave and pay are most generous in most of the European companies. The companies in Netherlands, where workers can be absent for up to 104 weeks (2 years), while receiving 70% of their salary.

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