The latest from IBI;
Mercury President: Fond du Lac manufacturing hinges on Sunday's union vote
By IBI Magazine
The fate of Mercury Marine's manufacturing operations in Fond du Lac, Wisconsin, will be determined by its union's vote on Sunday. Mercury President Mark Schwabero said in a Thursday press conference that if the 838 union members reject the proposed contract changes, the "population of workers in Fond du Lac will decline."
Union officials of the International Association of Machinists and Aerospace Workers, who spent several weeks negotiating with Mercury before talks ended with no agreement, told local media that they would vote "no" on the contract. One union leader called it "trash."
Union workers will now have a chance to vote for the revised contract, which includes changes regarding wages, benefits and operational flexibility.
"Those changes would allow us to be more competitive in those areas," said Schwabero. "We've done a lot of internal restructuring, but in spite of all that cost-cutting, we need to rationalize our manufacturing operations." The company has cut about 40 per cent of its non-union workforce over the last two years.
Schwabero said if the union rejects the revised contract, then Fond du Lac manufacturing would remain a "higher-cost" facility than its MerCruiser plant in Stillwater, Oklahoma.
Schwabero said that both plants' current capacities are running from 15 to 40 per cent, so it would make sense to consolidate operations."We believe that the boating industry will stay at a reduced level and that the recovery will be slower than in the past," he said. "If the union votes no, we would not move work into a higher cost location like Fond du Lac, and over time, jobs would move out to other lower-cost locations." But if union ratifies the contract, he added, Fond du Lac would be considered a "cost-competitive" location.
Even if the union votes no, and manufacturing is closed down in Fond du Lac, Mercury could retain it as its corporate headquarters, with limited manufacturing, customer service, IT and other functions. Schwabero added that, if the union rejects the proposed changes, the company would honor the existing contract, which still has about three years to run.
A "yes" vote on Sunday would mean that the current number of manufacturing jobs would remain in Fond du Lac, said Schwabero, and that more manufacturing jobs from Stillwater might end up there. "The impact on Stillwater would remain to be seen," said Schwabero. "We're more focused on getting Fond du Lac more competitive. We'll know after the vote."
Union leaders told local news sources that Mercury is disseminating half-truths about the contract. "He alluded to the fact that nobody would be losing any money that is here now, and that's just not true," union negotiator Russell Krings told WBAY. "I mean, they're going to be paying our vacation different, they're going to be taking some holidays away from us, our health care will be going up."
Union coordinate Dan Longsine added: "When I get up in front, I will not tell somebody else how to vote. Personally, I will vote no on this trash that the company has offered our employees."
Under the new contract, said Schwabero, current workers would not see a reduction in wages, though there would be fewer vacation days and any new hires or rehired employees would enter at a lower wage scale. But he said that salary level is "competitive" for the Fox Valley area. The proposals for "operational flexibility" would allow the company to respond better to changing market conditions. "Right now, we have 58 job classifications, and our proposal would bring that down to 11," he said. "It's the same flexibility we have in many of our other manufacturing locations. That agility is critical going forward."
Schwabero said a final decision on Mercury's future will be made by "summer's end."
(21 August 2009)
