Mercury Marine executives held a press conference Thursday afternoon to outline the details of its contract proposal for employees in Fond du Lac, Wis., and express the urgency that union members approve the new contract when it comes to a vote Sunday.
"Without changes to the [existing] contract, the cost structure in Fond du Lac would not be competitive," company president Mark Schwabero said. "Our decision would be to, over time, start moving jobs out of Fond du Lac to other locations.
"A yes vote says, at a minimum, we will keep the jobs that are here, here," he added.
Schwabero said a no vote does not necessarily mean the end of all operations in Fond du Lac, which serves as the engine builder's world headquarters. There are about 1,900 employees in Wisconsin - 838 of them are union, mostly manufacturing, and the rest are involved in engineering, IT, marketing and parts.
"That's all separate," he says.
Mercury is restructuring its business to emerge from the economic downturn as a stronger company in a different and much smaller market, Schwabero explained. One possible outcome is the consolidation of operations in either Fond du Lac, Wis., or Stillwater, Okla. Representatives of the company and the International Association of Machinists and Aerospace Workers Lodge 1947 have met during the last two weeks to negotiate needed changes to the existing four-year contract that was approved last year.
Union members will vote at 9 a.m. Sunday on changes to their contract proposed by the company. Union leaders did not agree to the concessions at the conclusion of negotiations earlier this week.
Chief union negotiator Dan Longsine told the Fond du Lac Reporter newspaper he's telling members to "vote their own conscience." He said the situation scares people, including him, when considering the potential consequences.
Mark Zillges, president of Local 1947, told the newspaper he will be voting against the proposals.
What bothers him most is a provision that calls for bringing recalled employees back at a lower wage.
"I told 'em I'll stand with them," Zillges said about the laid-off workers. "I've had immediate family ask, 'What about us?' I say, 'What about them, too?' I'll have to suffer like the next guy. Why should I gain and they'll suffer?"
Negotiations with union representatives in Fond du Lac have centered on a new seven-year contract that incorporates changes in wages, benefits and operational flexibility. Mercury had hoped to reach an agreement Monday with the union leadership, but talks broke down and union officials said they would take Mercury's offer to a membership vote Sunday.
Mercury's offer calls for no changes to wages for existing employees through 2012, with possible increases in 2012. Recalled employees and newly hired employees will receive a lower wage scale than current workers, but above average for similar jobs in the region, according Schwabero. The company is also offering cash incentives for early retirement or employees who may have opportunities elsewhere.
Operational flexibility relates to such issues as overtime. Currently, overtime is on a purely voluntary basis. Under the new contract, the company would be able to schedule overtime on a non-voluntary basis, with certain limitations with respect to holidays, the number of hours per month and the number of weekends per year.
Schwabero says this would give Mercury the agility and responsiveness it needs to produce more products on demand. Even when the recession ends, he expects dealers and boatbuilders won't be stocking up on engines as they have in the past.
"We think agility and responsiveness are going to be critical on a going-forward basis," he said.
— Melanie Winters