Union rejects pact; Mercury Marine to move jobs

SOURCE: Milwaukee Journal-Sentinel

Fond du Lac — In a move that could cost them their jobs, Mercury Marine Inc. employees Sunday by a large margin rejected contract concessions that would have included lower wages for new hires and employees called back from layoff.

The final vote was not immediately available.

After the vote, officials at Mercury Marine announced Sunday that the company will consolidate much of its Fond du Lac manufacturing operations with its existing operations in Stillwater, Okla.

The full consolidation is expected to take between 24 and 36 months, the company said. After the consolidation, the company said, there will be "from zero to 200" manufacturing jobs left at the Fond du Lac plant.

The consolidation is expected to begin later this year.

"This has been a very difficult and stressful process for all involved," company president Mark Schwabero said. "We will work closely with our team in Fond du Lac to develop and communicate a transition plan for this 24- to 36-month process."

Mercury expects to finalize details of state and local support programs over the next few days.

Union members simply could not accept concessions that would have drastically reduced the wages of laid-off employees, some with 30 years of tenure at the company, if they were called back to work, said Mark Zillges, president of International Association of Machinists and Aerospace Workers Lodge 1947, which represents the Mercury Marine plant workers.

Mercury, one of the Fox Valley's largest employers, has said that it will move much of its outboard engine manufacturing to Stillwater, Okla., unless its Fond du Lac labor union accepts contract concessions necessary to keep the company competitive.

The proposed concessions included a seven-year wage freeze, about 30% lower wages for new hires and workers called back from layoff, and changes in pension benefits that workers said would have made retirement unaffordable.

As many as 850 manufacturing jobs could be eliminated in Fond du Lac if the company shuts down its operations here over the next three years, according to the company. It would leave from "zero to 200" jobs at the plant, executives said.

It also could mean that Fond du Lac will lose Mercury Marine's world headquarters, which employs about 1,000 people.

Sunday's vote was pivotal for the 70-year-old outboard engine manufacturer with deep roots in Fond du Lac.

Although there's still time before for another union vote before the company's proposal expires Aug. 29, the company has said it wasn't interested in further negotiations.

After Fond du Lac County Executive Allen Buechel heard the outcome of the vote Sunday, he said the county had to move forward and figure out how to at least keep the company's headquarters in Fond du Lac.

He did not think that getting the union and Mercury Marine management together to talk again was going to be a possibility.

"We had an offer on the table to keep the whole operation here; the county, city and state, we were all prepared to do what we needed to do," Buechel said. "If close to half the jobs could leave now, we need to look and see if there's any way to keep at least some of the salaried jobs here."

If Fond du Lac loses the Mercury Marine company headquarters to Stillwater, too, Buechel said, the county is going to need to figure out how to change its economic development efforts and replace up to 2,000 jobs in the community.

"We've got to change our strategy to replace those jobs," he said. "It may take us 10 years, but we're going to have to do it."

Fond du Lac City Manager Tom Herre said, "I'm certainly disappointed. We had hoped that the future of Merc and Fond du Lac would be solidified today."

Herre added, "We recognize that we'll be in competition with Stillwater to keep the headquarters. There's no purpose in showing our cards in terms of specifics, but we'll talk about this at great length, and we'll come up with what we think is a competitive package to keep these jobs in Fond du Lac."