A low-interest loan that would have speeded Mercury Marine’s expansion plans at its Wisconsin facility was voted down Tuesday night, a somewhat unexpected move since an earlier vote seemed to indicate the loan would be approved.
Seventeen members of the Fond du Lac County Board of Supervisors supported a resolution to authorize the $10 million loan, two fewer than the number required for approval. Seven supervisors voted against the loan and a supervisor who works at Mercury abstained.
“This vote will not change our plans at Mercury Marine, but it will change the timing of our plans,” Mercury spokesman Steve Fleming told Trade Only Today. “We will still do everything we had said we would do. It just won’t happen at the accelerated rate the loan would’ve allowed us to do it at. Now the timing of how things happen will be more determined by the marketplace, as opposed to having the funds in hand.”
The buildings for the planned expansion are almost completely built, Fleming said, and the equipment needed to fill them is very expensive.
“The loan money was really aimed at acquiring the machinery for these buildings. And we’ll still acquire it, just not at the same pace we would’ve done otherwise,” Fleming said. “So it could take longer to acquire the machinery and hire new people for that. But — and, of course, it is all dependent on the marketplace and the economy, and other things that could happen — we still intend to do the same things we were going to do.”
Fond du Lac County Executive Allen Buechel expressed disappointment with the vote, telling the Fond du Lac Reporter that 24 supervisors who attended a closed-session meeting with Mercury last week had voiced support for the loan. Some of the supervisors changed their vote during the past week.
Mercury Marine borrowed $50 million from the county five years ago and invested it in endeavors that included expansions, research and development and the consolidation of its outboard and sterndrive operations, Fleming said.
“However, we’ve spent about $500 million in the past five years on R&D and capital investments,” Fleming said, investing $300 million in research and development and $210 million in capital expenditures between 2009 and 2013.
That investment led to the development of the successful 150-hp FourStroke outboard engine that the company says has not only helped it retain all 1,526 employees at the Fond du Lac, Wis., facility but also has prompted Mercury to add 1,507 new full-time employees.
The current expansion project could produce as many as 300 jobs over several years. If the loan had been approved, each full-time hire would give Mercury a $1,000 forgiveness on the loan, up to $300,000, Fleming said.
During the summer, Mercury held groundbreaking ceremonies for the $30 million expansion, which will add 38,000 square feet to the company’s 1.5 million-square-foot facility. The company said at the time that it planned to install new equipment by the end of this year, with additional equipment planned for installation in 2014 and 2015.
— Reagan Haynes