Mercury Marine threatens to leave if union vote fails

Posted: Aug. 20, 2009

Fond du Lac — The fate of hundreds of Mercury Marine Inc. manufacturing jobs will be decided in a union vote Sunday, and the outcome also may determine whether the 70-year-old company keeps its world headquarters in Fond du Lac.

Mercury, one of the Fox Valley's largest employers, said Thursday that it will probably move its outboard engine manufacturing to Stillwater, Okla., unless its Fond du Lac union votes to accept contract concessions.

Those concessions include a seven-year wage freeze and about 30% lower pay for new hires and employees called back to work from layoff.

Mercury, which has a workforce of 1,900 employees in Fond du Lac, also said it would be unlikely to keep its world headquarters in Fond du Lac if the manufacturing goes to Stillwater, where the company has operated a factory for 30 years.

Mercury will probably want to have its headquarters where the manufacturing is based, President Mark Schwabero said in an afternoon news conference at the Holiday Inn.

"There won't be a job for them" if the concessions aren't approved, Schwabero said.

Pulling out of Fond du Lac would cost Mercury, a division of Brunswick Corp., millions of dollars. Oklahoma state and local officials have offered to cover the costs in return for the jobs and taxes that the state would receive from the deal.

Likewise, Wisconsin has offered to cover the costs of moving work from Mercury's plant in Stillwater to Fond du Lac, possibly doubling the company's manufacturing employment here over the next seven years.

"We are comfortable no matter which way this goes," Schwabero said of the vote. "Our intention is to have a decision by the end of the summer for everything," including the company headquarters.

Union disgusted

Union leaders say they're disgusted by what they see as an all-or-nothing offer that could preserve jobs here now but is hard on the workforce and doesn't include long-term job guarantees.

"I can tell you that no one on the bargaining committee is going to vote for this," said Mark Zillges, president of the International Association of Machinists and Aerospace Workers Lodge 1947, which represents Mercury's 838 factory workers in Fond du Lac.

The union might file an unfair labor negotiation grievance against the company, Zillges said Thursday.

He predicted that there will be layoffs regardless of the outcome of the vote.

Mercury has given many reasons why it must reduce its manufacturing costs and why Oklahoma might be a better place to make its engines.

The global marine product market is less than half of what it was just a few years ago, according to the company, which is closely tied to Brunswick's recreational boat division.

Since 2007, Brunswick has closed half its North American boat manufacturing plants to reduce its capacity amid a deep sales slump.

Workforce cut in half

Brunswick's marine workforce, which makes boats and engines, has been reduced by more than half. Some of the company's largest competitors have filed for bankruptcy and also have made drastic cuts in their manufacturing operations.

This isn't a normal economic downturn for the boating industry. Nearly 75% of the jobs have been lost in the last two years, totaling more than 135,000 employees, according to Brunswick.

The company says the demand for marine products in the United States has dropped to its lowest level in more than 40 years.

Mercury must cut costs and consolidate operations, according to Schwabero.

The Stillwater plant already has many of the advantages that company officials are seeking in Fond du Lac, such as lower wages for new hires and more flexible work rules.

The Stillwater facility, which employs 376 people, is large enough to accommodate work now done in Fond du Lac.

Mercury is trying to influence people with half truths and statements not included in the written offer, according to Zillges.

"I think for spite they want to move some jobs to Oklahoma," he said.

Crucial vote

Both company and union officials have ratcheted up their efforts to sway Sunday's vote, which the company says is pivotal to its future.

The loss of Mercury in Fond du Lac could drive the area's unemployment rate to 13%, similar to what happened after General Motors closed its SUV assembly plant in Janesville.

Schwabero said the decision will rest on his shoulders, contingent on Brunswick's approval.

Mercury has employees in Fond du Lac and Stillwater who have worked decades for the company and whose jobs are at stake.

"It's not that any of them have done something wrong. This is about the reality of business conditions," Schwabero said.