Lincoln Electric Company

However, Zachary Schiller notes in Business Week that Lincoln Electric is not likely to be able to maintain this unusual and generous pay structure (Schiller, "A Model Incentive Plan Gets Caught in a Vise," Business Week, January 22, 1996, pp. 91-92). Although the company is recording record revenues, it now has a larger number of outside shareholders and outside directors who are interested in trimming costs, including costs associated with the bonus program.

Morale has suffered as a result, and the company has had to establish committees to investigate the best way to approach the situation. When word w

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ed, but analysts suspect that the actual number of production units being shipped remains below what GE initially forecast. The result is that if the marketing campaign is successful, GE may be helping its competitors since its own model may not always be available. The competition is likely to have models out that can compete directly with Maxus in a short period of time, and there are other technological changes coming in this market segment which may shorten the lifecycle of the Maxus in any case. New environmental standards, based on European designs, have been approved for implementation in the United States for the year 2000, but GE and other manufacturers were successful in securing a moratorium on these standards. Whirlpool, which already has the technology in place to produce these new machines, favors rapid implementation. In any case, a one-year moratorium offers only a slight reprieve for a machine that marks the most radical departure from GE's design in more than 40 years. GE has ostensibly learned that it needs to have supply ready when it creates demand for a new product, and the introduction of its next new model is likely to be accompanied by appropriate levels of available production units. Betsy Morris
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Approximate Word count = 1855
Approximate Pages = 7 (250 words per page)

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