Labor negotiations are entered in the Human Resources area, which is available from the Decisions menu in Capstone.xls. Negotiations can be viewed as exception events — sudden changes in the operating environment.

Labor opens the contract offers from all of the companies, reviews the most favorable terms, and assuming they are 10% above the current Industry Best, uses them as a standard for negotiation with every company. This creates an opportunity for a low labor-cost company (due to automation and other investments) to impose higher labor costs upon other firms.

Labor and Management negotiate over four separate categories:

• Hourly Wage
• Benefits
• Profit Sharing %
• Annual Raise

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