practice case

Hondo, Texas Case

George Mackee thought of himself as bright, energetic, and with lots of potential. So why was

this happening to me, he thought. George, his wife Mary, and their two children had moved to

Hondo, Texas, from El Paso four years ago. George became the manager of Ardnak Plastic Inc.,

a small plant that manufactured plastic parts for small equipment. The plant employed several

hundred workers, which was a substantial portion of the population of Hondo. Ardnak Plastics

Inc. had several small plants the size of Hondo’s, and George had a good relationship with Bill,

his boss, in Austin, Texas.

One of the problems George’s plant had was that the smokestack emissions were consistently

above EPA guidelines. Several months ago George got a call from Bill stating that the EPA had

contacted him about the problem and fines would be levied. George admitted the situation was a

continual problem, but because headquarters would not invest in new smokestack scrubbers, he

did not know what to do. Bill replied by saying that margins were at their limits and there was no

money for new scrubbers. Besides, Bill commented, other plants were in worse shape than his

and they were passing EPA standards.

George ended the conversation by assuring Bill that he would look into the matter. He

immediately started calling his contemporaries at other Ardnak plants. He found they were

scheduling their heavy emissions work at night so that during the day when the EPA took their

sporadic readings they were within standards. George contemplated this option even though it

would result in increasing air contamination levels.

A month went by and George still had not found a solution. The phone rang; it was Bill. Bill

expressed his displeasure with the new fines for the month and reminded George that there were

very few jobs out in the industry. That is when Bill dropped the whole thing into George’s lap.

Bill had been speaking to the Mexican government and had received assurances that no such

clean air restrictions would be imposed on Ardnak if they relocated 15 miles south of Hondo in

Mexico. However, Ardnak must hire Mexican workers. Bill explained that the reason for

relocating would be to eliminate the EPA problems. Bill told George he had one week to decide

whether to eliminate the fines by correcting the current problems or by relocating.

George knew that relocating the plant on the Mexican side would devastate the infrastructure of

the city of Hondo and would continue to put contaminants into the air on the U.S. side. After

mentioning the possibility to Mary, other concerns were reinforced. She did not want him to be

responsible for the loss of jobs for their friends and extended families.

Assume you are the George Mackee when analyzing this case.