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This is part of a case series. The Chairman's statement on the 1998 Interim Report of Hong Kong Aircraft Engineering Company Limited (HAECO) was grim. The squeeze on the airline industry's profits had a rippling effect on the aircraft engineering industry throughout the 1990s. Now, a month after the move to the new Hong Kong International Airport in July, HAECO's previous monopoly status in Hong Kong was undermined, overhead costs of operating in a larger airport were immense, and new work patterns had to be devised. Stephen Lau, Director of Support and Development, was faced with the predicament of how the Company should ensure its continued profitability with the co- operation of its 4,800 employees. Since HAECO established a Works Consultative Committee (WCC) in 1968, the Company had created a vehicle for consultation with its employees, which had guided the Company through many different events. Now faced with a new set of issues that were unprecedented in the 48-year history of HAECO, the paternalistic framework of the Company came under scrutiny. Could the WCC guide the Company through this difficult time?