Executive Summery

This report is prepared on industrial relation of a case on American Mining Company It is

prepared solely for academic purpose of learning Human Resource Management industrial
relation process. In the Background part of the case all the relevant information about the
case is discussed. It discloses everything in the case in brief. Here everything is disclosed
about me, from the past to the current situation. This part is the basic of this case analysis.
Everything important in the case is discussed here.The next part of the case is Theme. In
this part we have discussed about moving of AMC from regional country to Colombia and
the revolts of revel groups and the future of industrial relationship through this case.
Main Issue reveals the most important problem in this case. And what initiatives the
company should take for the problems.My next part is Biased SWOT Analysis and this part
thoroughly discusses about some following strength, weaknesses

Background
AMC is one of the leading coal mining companies in USA that had finished moving nearly all
of its coal operation from the southern united state to premier mine in Northeast Colombia.
Before move to Colombia.AMC was one of the the top 300 largest private companies in
USA that providing high quality coal, reliable delivery and excellent service. By moving to
Colombia, Mine Company provided three of numerous advantages for AMC such as type of
payment for worker where lower wages provided for worker in Colombia rather than US
mine workers, Colombia the worlds largest coal reserve and the government offered for
protection of the company operation and its employees. However, established the company
in Colombia so many obstacles that American mining Company faced such as business and
political environment problems such as security, attack the company , worker and foreigner
investor for growth the development prospects.

BACKGROUND
AMC Moves to Colombia:
AMC was one of the leading coal mining company in America for a long period of time and it
was among the top 300 largest private companies in America before it shifted to Colombia.
AMC had a reputation of providing high quality coal, reliable delivery and excellent service.
AMC told its workers that the company would not transfer its operations to abroad but they
did eventually. AMC moved to Colombia because the country provided some very crucial
advantages. Among the advantages posed by Colombia, one was that the labor cost was
much cheaper compared to that of Americas. Wages for Colombian mine workers ranged
from $500-$1,000 a month wheres U.S mines workers recieved over $3,000 monthly plus
benefits. Also, AMC did not have to put up with the strict rules and regulations of the U.S.
mine union like limited working hours and mandatory safety conditions. In Colombia,
workers were willing to work for much longer hours and in more dangerous conditions.
Another advantage for AMC to move its operations to Colombia was that the country held
worlds third largest reserve of coal. Its natural resources generated some of the highest

quality thermal coal compared to anywhere in the world. Finally, the advantage which was
like icing on the cake was that Colombian government was extremely eager to provide AMC
with lucrative investment incentives because the government was hit by enormous high
public debt and was feeling pressured to privatize its national industries and attract foreign
investment in order to meet International Monetary Fund (IMF) loan conditions. The
incentives offered by Colombian government included tax-free operations for the first ten
years, extremely cheap land holding Colombias best coal reserves, and subsidized
infrastructure development. The seaport with capacityto move 10 million tons of coal per
year would be for the exclusive use of AMC. Over 500 soldiers of Colombian army would
be.
MAIN ISSUES
This article explained about businesss condition and countrys problem which is happened
in Colombia and affect to AMC (American Mining Company) growth prospect.
SWOT
Strength:
Strength could include a company specialist and location. There are many aspect of
business to be growth the prospect in mining that AMC have in Colombia compare in US.
The strength includes:
* The type of payment of labor of AMC, In Colombia the company will get more benefit such
as payment of wages for Colombian mine worker much cheaper that US mine worker.
* No restriction labor mine from Colombian union or government such limited working hour
and safety mandatory condition. This condition caused increasing of unemployment in
Colombia.
* Colombia the world largest of coal reserves. This can increase the quality of coal in the
world. * Government also offered numerous attractive investments to AMC such as tax-free
operational and subsidized Infrastructure development. * Colombia army.

After years of stagnation and predominantly utilized and saturated domestic market, the
board of directors has decided to overcome old-fashioned nationalistic politics in the firm
and to explore the possibility of expansion on the international market mainly due low sales
and market saturation.
II. Underlying Issue
By taking factors such as country output as the most important factor, and country stability

proximity and currency strength which country or countries should provide AMM best
chance of expanding internationally?
III. Relevant Facts
A. AMM sales have risen to $290 million by the time Harry Bednar (son of the founder of
the AMM Company) retired in 1998.Since than the sales have only raised to $330 million
which is a total of 2.9%. 1. Financial and operational controls initiated by Mike Luce(nonfamily professional manager hired as President and CEO) cause net profits to increase from
3% to 6% of gross sales which produced large return on equity.
B. AMM American Mining and Machinery is a specialized producer of heavy mining
equipment for the extractive industries. It is founded by Edward Bednar in 1902 with
backing from few wealthy investors. 1. Harry Bednar took over the company at 1948 and
continued his father s management style, which could be best described as antiunion
paternalism. 2. Edward Bednar and his son Harry Bednar were both skilled engineers and
designers with an intuitive rather than professional approach to the administration business.
3. They sold their products exclusively in the United States. 4. After Harry Bednar retirement
the board of directors appointed first non-family President and CEO forty-one year old Mike
Luce. 5. Since Mike Luce was appointed as the president, the board of directors change
their attitude toward...