Mercury Marine and the union that represents the company's hourly workers in Fond du Lac, Wis., failed to meet Monday's deadline for finalization of a contract agreement.
Company officials and representatives from the International Association of Machinists and Aerospace Workers Lodge 1947 talked for about five hours Monday in Fond du Lac before the union informed Mercury of its plans to take the company's proposal to its membership for a vote Sunday.
"It's extremely disappointing that these past two weeks of negotiations, as well as months of preparation, have not resulted in a tentative agreement," Mercury Marine president Mark Schwabero said in a statement. "We have been extremely open and honest with our employees and their representatives about the challenges that must be overcome if Mercury is to remain in Fond du Lac.
"This is not an attempt to take advantage of a struggling economy," Schwabero continued. "The terms being presented to the union are truly the best option for a competitive and profitable operation. The company has been very open and forthcoming and, we think, reasonable in our requests."
Mercury is restructuring its business to emerge from the economic downturn as a stronger company in a different and much smaller market. One possible outcome is the consolidation of operations in either Stillwater, Okla., or Fond du Lac. Representatives of the company and union leadership have met during the last two weeks to negotiate needed changes on benefits, wages and operational flexibility.
Mercury says its proposal for the Fond du Lac workers has the potential for a long-term contract that includes wages that are competitive for the region, a benefits package similar to that of Mercury's salaried workers and operational flexibility similar to that in place at other locations.
The offer calls for a seven-year wage freeze, pay cuts for laid-off employees called back to work and higher health care costs for retirees, according to the union in a report in the Milwaukee Journal-Sentinel.
"If I wanted to retire at age 62, my pension wouldn't even cover what I had to pay for health insurance," Mark Zillges, president of Lodge 1947, told the newspaper.
Union officials said they wanted job guarantees for their members if they accepted contract concessions.
The company offered "assurances" that it would keep a presence in Fond du Lac, but did not guarantee jobs for hourly employees, according to the union.
"I think for spite they are going to move some jobs to Oklahoma," Zillges told the newspaper. "But I don't think the company has the millions of dollars it would cost to do an environmental cleanup of the plant site here" in order to shut it down.