My thoughts on Mercury Marine & the IAMAW

Earlier tonight I mentioned that union workers at the Mercury Marine plant in Fond Du Lac rejected contract concessions that would have included a 30% wage cut for new hires and employees called back from layoffs and severely slashed retirement and severance benefits, in addition to the 7-year wage freeze union members had already accepted as part of their last negotiated contract with Mercury Marine. While some conservatives have been quick to attack union members for voting to kill their own jobs, Steve Jagler of the Milwaukee Biz Times points out that the real villain in this story may be Mercury Marine:

The question is being asked at dinner tables and water coolers throughout Wisconsin: Why would those union workers at Mercury Marine’s Fond du Lac plant vote against the company’s last contract proposal?

[…]

The first thing to understand is the history that brought the Mercury Fond du Lac contract dispute to this point. The company signed a contract extension through 2012 for the workers in Fond du Lac only last year. “Now, they turn around and say, ‘We need a complete rewrite, from cover to cover, of the contract THEY negotiated. It’s union busting,” said Mike King of the IAMAW. “When it’s told to you across the table by a union-busting consultant (hired by the company), it really leaves a bad taste in your mouth.”

In recent years, Mercury Marine had laid off about 600 people from the Fond du Lac plant and shifted production to China. The laid off employees could not participate in Sunday’s contract vote.

The layoffs left the Fond du Lac plant with a senior-laden workforce. Most of the employees who still have jobs there have 25 to 30 years of experience at the plant. For many of them, retirement is on the near horizon.

Put yourself in their shoes. You are very near retirement. You are making a fine living wage. You have negotiated health care and pension benefits. The company is proposing a new contract that will slash your pay and eliminate most of your benefits, including severance pay for outgoing workers. The contract will cut benefits for retirees and will cut wages for new hires.

Ultimately, it certainly seems as if Mercury Marine intended to move its headquarters and production facility to Stillwater, Oklahoma all along. The company’s request for the union to acquiesce to deeper concessions than the ones the union agreed to during the last round of contract negotiations gave Mercury Marine a convenient scapegoat as they moved to the greener pastures of Stillwater.

However, if I were a worker for Mercury Marine (or a potential worker) in Stillwater, Oklahoma, I wouldn’t be too giddy about the prospect of Mercury Marine creating new jobs in that community. After all, if Mercury Marine is willing to pull up stakes and abandon a community they’ve had a connection with for 70 years, then there won’t be much keeping Mercury from kicking Stillwater to the curb in a few years when the company gets a sweeter deal in Mexico or China or some other country where labor is cheaper.

H/T to Paul Soglin.

78 comments to My thoughts on Mercury Marine & the IAMAW

  • Mercury Marine is also responsible for dumping a lot of PCBs into local waterways. They are not the best neighbor to have around after all, or so it would seem.

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    • But were the workers that actually performed the dumping union workers? Perhaps they are not the best to have around either.

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      • It depends on who ordered it, and who knew about it. It is unlikely that a lower level worker would have that knowledge and/or authority.

        I feel confident it was management.

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        • Capper, IMO its a bit of both the lower workers and managment.

          From the toxic tort cases I’ve followed the dumping usually occurs at two levels mid management and lower level workers. At the upper managment level, policies are adopted to prevent this type of conduct. Uually the polcies are prepared by the general counsel types and adopted by the board. However, mid-management is responsible for implementing and following the policies. Unfortunatly, mid managers will sometimes not follow corporate policy if they can improve their performance numbers to obtain a bonus.

          At the lower level, these types of things happen when dumping is easier than following the rules and no one is looking over their shoulder. Sometimes it comes down to whether you blame managment for not policing the rules or the wokers for breaking the rules.

          I’d say blame them both

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  • PartiallyBlue

    When it’s no longer a partnership, it’s time to strike.

    When management makes demands upon labor: then strike.
    When management educates labor and asks for help: then negotiate.
    When management offers equity to unions and employees for concessions: give them more than they ask for.

    Work towards partnership. Employees and company management are joined at the hip. When they forget, remind them you are in this together.

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  • Who or what prevented laid off workers from voting?

    Conspiracy theories from IAMAW Midwest territory vice president Philip Gruber aside, what evidence is there that “Mercury Marine intended to move its headquarters and production facility to Stillwater, Oklahoma all along?”

    Instead, why not ask: what has changed in the landscape since the last round of contract negotiations? Isn’t it reasonable to believe that Combined Reporting (thank you Jim Doyle)
    and Federal Cap&Tax Legislation (thank you Congressional Democrats) have altered this company’s financial outlook?

    Oklahoma is both free from combined reporting and free from forced unionization. Ability to compete…ability to make a buck is what it’s all about. You can’t handcuff the hands and shackle the feet of business and expect them to succeed.

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  • PartiallyBlue

    Unions are not handcuffs nor shackles except to restrain those who would use their might to take advantage of workers.

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  • Merc made a business decision. The union was given a say in what that decision was and they decided to send the jobs south. Merc is in business to make money, not supply jobs. Job creation is a BENEFIT to the community where the business is located. When the liability of union labor becomes too much for the company to handle and the state is also making it hard for them to make money and not to mention the economy sucking, the company moves. They move to stay in business. I’m still trying to figure out why union members think working for a company automatically gives you a partnership in that company. What risk did the EMPLOYEE take when the business was started? What entitles the employee to any partnership whatsoever in that business when they did absolutely nothing to start the business? Unions were necessary at one time in history but now have become a burden on business. They need to go.

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    • PartiallyBlue

      Good luck running those companies without labor. Especially those that were hired when the company just started. According to you, that first round of employees risked nothing by coming to a company that has no reputation, no income, no infrastructure, and no established means of making payroll.

      In established companies, employees make choices every day that can cost a company money or reputation, or they can save same.

      When the company or the employees think too much of their contribution to the enterprise’s success there will be problems. If it is not a partnership for common success then what is it?

      I was in three start-up operations as a mid-level manager in which the contributions of employees in time,knowledge,and effort exceeded what they were being paid many fold. If that is not an investment then please tell me what is.

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      • Locke

        Good luck running those companies without labor.

        Except there is nothing resembling a shortage of labor these days. With unemployment rates what they are, there are literally millions of people willing to work these types of jobs. Unfortunately for Wisconsin, the cost of labor and of doing business in general is higher than many other options, so companies are moving. This doesn’t even touch on cheap foreign labor.

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        • PartiallyBlue

          Yes and there is truth in what you say. I would add that unions do not win if their labor force does not have jobs. Companies do not win if workers have no money to purchase goods and services. Especially boats as you pointed out.

          Any company that can produce the same product for cheaper costs should go do that. Just close the doors and go. But they don’t. Management asks for concessions without improving the product, increasing sales, and/or changing the mfg process. If the product cost reduction strategy is to lower worker’s wages two years in a row (after bargaining and receiving a lower wage from the union the previous year) then that management team needs to be shaken up and shaken out.
          Just paying people less money is not a sustainable product strategy.

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          • Locke

            In general, I can’t say I disagree. I tend to assume management is doing what they can in all the other areas to, to reduce costs, increase quality & sales, etc. There are typically a lot of incentives to do so. If that’s not the case, then by all means give them the boot. That said, the single biggest cost of producing a boat, car, motor or similar is labor costs, so that gets the most attention.

            But one of the fundamental problems in business is that it’s much tougher to evaluate management than a line worker. A guy isn’t getting his parts done & on their way quick enough or is doing shoddy work, it’s relatively easy to tell. Management decisions on the other hand – there’s a lot more gray and it often doesn’t become clear if something was a good decision or a bad one until quite awhile later.

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  • When the employees think too much of their contribution, they form unions. Unions don’t let the employee think for themselves but only for the collective. Where one employee, like yourself, may be seen as an asset and beneficial to the success of the company, that company should be allowed to compensate you base on your performance. Unions don’t allow for this. The good employees, unfortunately, get lumped in with the bad and are bound to the same treatment as the slacker. If you think there is a company out there that can’t get laborers without having them unionized, you are mistaken. Were those start up companies union shops?

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  • Locke

    The first thing to understand is the history that brought the Mercury Fond du Lac contract dispute to this point.

    The second thing to understand would be very recent history. With declining margins and profits before the economy went in the crapper, the last few years have been nothing short of devastating to the marine industry. When you see Brunswick, think GM (except with about 3 times the number of brands). Now magnify it by ten because boats are the ultimate optional purchase – people need cars to get to work, no one needs to buy a boat (well except for commercial uses). A recovery in this industry is probably 5 years away at best so they need to cut every penny they can to survive – and many still won’t.

    Don’t get me wrong – contracts need to be honored. But when I look at that industry and the difficulties they’re in the middle of, and those still coming, I’m willing to give the company the benefit of the doubt. Dead companies employ no one.

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  • It is one thing to ask for concessions. It is completely another to demand slavery. Merc was going to leave regardless of which way the union voted. There was no reason for them to cut their own throats for nothing.

    If Merc was serious, the salaried employees and management would have been making sacrifices as well. They didn’t. This was just a dump job by some greedy SOBs, and trying to spin it as something else.

    Unfortunately, there are pap eaters that are buying it hook, line and sinker.

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    • Go to mercurymarine.com and look at what they were offering. Completely fair to sustain a good living and keep the company alive. Remember Capper, this is private industry, not the government who seems to think there is a never ending supply of money. The current voting workers made a bad choice by listening to the union bosses…..

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      • That is simply BS. Merc was leaving anyway. Why should they have given a dime? Look at what all the butt kissing got the people at MJS. Less money for the few months they were “allowed” to work, then booted to the curb.

        And Merc should not even be having a listing of what was offered unless an agreement was made. More violations of the federal law and more bad faith bargaining, showing what crooks they really are.

        Furthermore, why the hell should anyone believe them?

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        • Why not take the contract and then look for another job if they were facing what you call “slavery”? Would it not be better to have a job and look around for something better in the meantime rather than vote to extinguish your job as well as your co-workers’ jobs?

          Why would Mercury Marine want to move to Stillwater if it were not for a toxic tax climate in addition to the overpaid work force? Their manufacturing plant is enormous and Wisconsin has a ton of lakes (unlike Oklahoma). There is going to be a plethora of headaches for the company to work in compliance with another state’s laws. This was Mercury Marine acting on a survival instinct. If the workers did not want to go along with it, that’s their own fault, not the company’s.

          I can gurantee you that they will not have much trouble finding people to work the jobs that the union drones in Fond du Lac spit on. That union sure showed Mercury Marine and those bean-counting fat cats, didn’t they? The union took a stand and cost their members hundreds of jobs. Companies are getting wise to the thuggery of unions and are not putting up with it anymore. Honestly, unions had their place in ensuring safe working envrironments and appropriate compensation back in the 1920s-1960s, but they are obsolete and more of a stumbling block to the American economy than a help.

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          • Your argument is dead on arrival. If this was an issue of survival, the executives and the non-repped people would have also been making sacrifices.

            They did not.

            This was pure and simple greed. It is true that Oklahoma offered them all sorts of benefits that they would not get in Wisconsin. But for what they are gaining, that would be like spending $20 to end up with $5. Not a good bargain for Oklahoma.

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            • Yes, you’re absolutely right. The corporate greed once again took complete advantage of the little guy. Those big, bad, evil businesses…who needs them anyway?

              Why are “the executives” so beholden to the union drones? Ask GM how well unionization is working.

              Face it, someone on an assembly line is an interchangeable part. If the part acts up, it is thrown away and replaced by a new one. That’s the cold, cruel world for you. If you don’t like it, get a government job where you don’t have to turn a profit or cut compensation in the middle of a recession.

              They moved to Stillwater because it made more business sense, not because it was “the right thing to do.” Why stay in a state where your workers are too expensive and the tax environment removes the incentive for profit?

              But no, they should keep their costs where they are and risk the company having to make further layoffs or failing altogether since they make boat motors which are purchased by the evil rich to flaunt their wealth in the faces of the have-nots.

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              • Gee, you don’t happen to listen to talk radio or watch Fox News much, do you?

                The thing is, they were leaving anyway. Why give up what you earned, only to lose it all later anyway? The folks at the local rag are wishing they had that much sense. They gave back raises, paid more for health insurance, and took voluntary time off. They still got the boot.

                Meanwhile, Steve Smith is still raking in the personal profits. This is exactly why strong unions are needed.

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                • From JSOnline:

                  Mercury says the union rejected its best and final contract proposal, and the company is not asking for further negotiations.

                  The company’s salaried employees have accepted wage freezes and furloughs, Schwabero said, and now the company knows where the union stands on concessions.

                  I didn’t see anywhere in the contract proposal that asked for furloughs of union employees. Maybe it wasn’t just union members who were asked to sacrifice. It was the union who made the decision not to sacrifice…..

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                  • That is not what the non-represented employees were saying when interviewed yesterday.

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                    • More from JSOnline:
                      As the result of Sunday’s vote, the company has stepped up plans to move hundreds of jobs to a non-union Mercury plant in Stillwater, Okla.

                      Company officials have said they would keep the jobs in Fond du Lac, if the union accepts it contract proposal before Saturday at midnight.

                      This seems to debunk the “That is simply BS. Merc was leaving anyway” BS you were pushing the other day….

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                    • This is completely in the unions lap now. I can’t wait to hear your defense when the union bosses screws the people who pay their salaries.

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                • Actually, Capper, I do this unique thing called thinking for myself and arriving at my own opinions on various issues. I don’t even have cable, thus no Fox News for me. As for my listening habits, I enjoy a ride to or from work set to the masterpieces of various 19th and 20th century classical and romantic era composers (Verdi, Beethoven, Brahms, etc). I especially enjoy Gustav Mahler’s Symphony No. 2 and No. 8.

                  You do realize that by telling me that I do not think for myself, you are setting a standard that the union did not take for themselves. They did what they were told by their leadership. Now it appears that they have a bit of buyer’s remorse about this vote.

                  What part of lowering expenses is so hard to comprehend? Labor costs are the most expensive part of the business. Again, if the offer was so odious, why not vote to take it and then leave for a better job rather than screw over Fond du Lac and a myriad of other employers in the city (realtors, retail stores, restaurants…)?

                  I don’t even blame the union as much as I blame the Governor and the legislature for creating a tax climate that is so awful for profits.

                  I also don’t understand your beef with Steve Smith. If he is making money, that means that he will have to pay more taxes, right? Aren’t you guys all about having more taxes? Shouldn’t you be happy?

                  As an aside: Why are liberals always so angry? Even when you guys run everything (as you do right now), you are still walking around blaming Bush with a chip on your shoulder. If you don’t like it, fix it! You run EVERYTHING.

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                  • You claim to think for yourself, but then you should realize the union is not moving Mercury Marine. The company is moving itself.

                    They issued a ransom notice, not a contract offer. The union chose not to pay the ransom. So the company decided to off their captive, Fond du Lac.

                    If you do not understand that enjoying excessive profit at the expense of those that helped you gain said profit is unethical, that is on you, not me.

                    And who’s angry? I am just pointing out the untruths being told by the conservatives.

                    The fact is Mercenary Marine played all of Fond du Lac and the conservatives who took their side as patsies.

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                    • Locke

                      If you do not understand that enjoying excessive profit at the expense of those that helped you gain said profit is unethical, that is on you, not me.

                      If you believe Mercury/Brunswick is enjoying excessive profits right now, you’re smoking some really tremendous stuff. Seriously.

                      2008 sales dropped by a billion dollars from 2007. Marine engine segment had sales drop by $400 million. This excessive profit of which you speak? A loss of $788 million in 2008. 2009 will be worse, with analysts estimating sales dropping by another 30%.
                      source: http://finance.yahoo.com/q?s=bc

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  • OK, Locke, then please explain how the CEO got an 8% raise.

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    • Locke

      ???

      You made an absurd claim about excessive profits, and I provided facts clearly disproving that. So you respond with an unsourced and completely unrelated one.

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  • There is no room for facts in cappers union utopia. The only thing capper knows is union rhetoric. Company bad… Union good…. That’s it.

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  • Zach,
    My take is that this stand still is a “Win Win” for the individuals involved. The Union members that voted against win because as you point out:

    “Put yourself in their shoes. You are very near retirement. You are making a fine living wage. You have negotiated health care and pension benefits. The company is proposing a new contract that will slash your pay and eliminate most of your benefits, including severance pay for outgoing workers. The contract will cut benefits for retirees and will cut wages for new hires.”

    IOW they win, they keep their benefits.

    The company also wins, because if as you suggest, it was going to move any, it now can move, and probably gain additional funds in the process at the same time everyone faults the union.

    Now who are the losers? FDL for sure. I would also think that the union members that were not near retirement or the temporary laid off individuals that were not allowed to vote as they obviously have different interests than the members who have jobs, senority, and will be retiring anyway.

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    • Now who are the losers? FDL for sure. I would also think that the union members that were not near retirement or the temporary laid off individuals that were not allowed to vote as they obviously have different interests than the members who have jobs, senority, and will be retiring anyway.

      Actually, the reports show that most of the “temporary” laid off workers also had many years in, and most were against the contract.

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    • Locke

      Two problems with this. First of all, the majority of reports I’ve seen say the current employees don’t get their pay and benefit slashed in the new contract.

      Second – if they think they’re going to hang on for two or three years until they can retire, I think they’re going to be in for a big surprise. Aside from being incredibly selfish, I predict it’s going to prove to be a foolish move for them anyway. Sales are so low right now, with forecasts looking worse, not better – what reason is there for Mercury to not just shut down production here immediately?

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      • That’s if they don’t get laid off first. Secondly, having two tiers of workers will spell disaster for the company. What kind of motivation would a person with 15 years of seniority have making $13/hour, when the person next to him also has 15 years of experience, doing the same work, but is making $20.

        As for your second point, Mercenary Marine said that it would take 24-36 months to complete the move. Of course, that could be just another one of their lies.

        The question is: Why did Mercenary Marine refuse to include language that they would stay?

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  • Locke-

    According to the Executive Paywatch Database, Dustan McCoy, CEO of the Brunswick Corporation (Mercury Marine’s parent company), “In 2008, Dustan E. McCoy raked in $9,334,343 in total compensation. In the previous year the CEO of this company made $8,623,206. Total CEO compensation has increased by 8%.”

    Silent E-

    I take great pleasure in helping you make yourself look the fool that you are. Thank you.

    Source

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  • Locke

    crapper – Great, way to go. You proved that the CEO got a raise. Good evidence that the CEO is probably overpaid too.

    But again, how does that make the lie you told about the company making excessive profits true?

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    • me: OK, Locke, then please explain how the CEO got an 8% raise.

      Locke: You made an absurd claim about excessive profits, and I provided facts clearly disproving that. So you respond with an unsourced and completely unrelated one.

      So I provide the information that was questioned. Anyone that had the ability for independent thought would be able to connect the fact that the CEO making over $9M would be a fair indicate that the company was making good profit.

      Instead, we have an emotionally stunted name calling. Yeah, I’m intimidated.

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  • Locke

    you: the company is moving itself…made excessive profits
    me: they’re not making any profit – bleeding money.
    you: oh yeah, well then explain the CEO getting a raise

    I don’t care about the CEO getting a raise and it has nothing to do with the fact that nobody is buying boats/motors. CEOs get paid too much? Yes – absolutely. 1% of them are worth every penny and more (Apple couldn’t pay Jobs too much for what he’s worth) 4% are paid reasonably what they’re worth and 95% are grossly overpaid. SO WHAT? The company said, here’s the offer you want a job, this is it. You don’t, we’ll move. Is it fair? Probably not. Does it suck? Sure it sucks for Wisconsin workers that we have an environment where taxes and legislation make it a PITA for companies to do business here and effectively increase the cost of our labor. The option was give up some things or lose your job. A rational person would say, “well that sucks, but I need a job.” “I’ll keep my job and try to find a better one.” An irrational person says, “screw you, screw you, screw everybody.”

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  • Again, they were going to move no matter what. The workers would have given up a third of their pay and received nothing in return. That is not smart either. It was Mercenary Marine that said screw you to everyone, not the workers.

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  • A fool is one who can’t think for himself…….

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  • I love it when you guys say that. It means you got nothing…… Your union controls you Capper. The same way the union controlled those folks in Fondy and the union, who probably cared less about it’s members than Merc cares about it’s employees, just sent them to the unemployment line. Even when the members asked to vote again the union leaders said no. The leaders that get paid by the union. The decision doesn’t affect them. Why should they care? It’s all about THE UNION and THE UNION making money and feeding it’s leaders, not the people who actually make up the rank and file…. Does that sound familiar Capper… The union management is no different the the evil businesses you preach about and you are so brainwashed by their rhetoric that your too blind to see it…..

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    • Locke

      Give it up. That idiotic blather about “you just parrot Rush” or whoever…when you hear that, just stop. It’s like Godwin’s once somebody goes there, the discussion is no longer worth pursuing.

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    • E, no offense, but that makes no sense. Why would the union leaders want Mercury Marine to leave, taking all those union jobs with them? After all, if all those union jobs leave, that’d make those union bosses pretty unnecessary.

      Just because someone is a union member, that doesn’t mean they’re automatically “controlled” by their union.

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    • Actually, no. The union wanted to endorse Hillary Clinton during the primaries. I voted for Obama.

      The unions endorsed Alberta Darling at one time. I called them on it.

      I vote for who I think is best, regardless of who the union endorses, or what the talk show host say. Can you say that?

      And besides, as Zach pointed out, the union bosses are also employees. They will be out of work as well. Sometimes, one has to take a stand. I am sorry for the people that are getting screwed by Mercenary Marine, but they would have only been screwed worse if they followed your ideology.

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  • C’mon Zach… If they get a new vote on the same contract it compromises other votes that are being negotiated elsewhere. The union will take care of it’s own people after trashing the rank and file. The union messed up and they know it but they’re happy tossing a few hundred people for the greater good. That doesn’t sound like “REPRESENTATION” to me. The union is a business just like Merc and it made a business decision just like Merc only Merc is willing to let the employees vote again to keep them on. The union????? Not so much. As far as being controlled… Why did the members vote the way they did the first time? Because the union told them to. Now the members are paying for not using their own heads……. Control.

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  • Screwed worse capper???? Did you actually say that? What’s worse than being out of work? Making the same without a raise for a while or standing in the unemployment line and eating Roundy’s Mac and Cheese for every meal……… Listen to what you’re saying!!!!! There is absolutely no logic whatsoever in your statements.

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    • How hard is this for you to understand?

      Merc was leaving. No. Matter. What. Was. Voted.

      They were leaving. So which makes more sense, doing the work for two years at $20, or doing the same work for two years for $13?

      Even you should figure that one out.

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  • Tell me this capper… What’s more important, feeding your family or “taking a stand” and losing your job just because your union told you to do so?
    Unbelievable……..

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    • Again.

      How hard is this for you to understand?

      Merc was leaving. No. Matter. What. Was. Voted.

      They were leaving. So which makes more sense, doing the work for two years at $20, or doing the same work for two years for $13?

      Even you should figure that one out.

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      • Locke

        Again.
        How hard is this for you to understand?
        Merc was leaving. No. Matter. What. Was. Voted.

        Now that Merc has decided to allow a final vote beyond the deadline, is there anything else that you just know to be true?

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        • The reason is still the same. If the contract is approved, then Mercenary Marine can pay the workers less as they are packing up and moving out.

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          • Capper, you believe Mercury Marine is moving regardless of the vote. How do you reconcile your belief with Governor Doyle’s statement that if the union accepts the company offer it will mean expansion in FDL? Do you believe Doyle is so incompetent that he doesn’t have a handle on the situation? Or do you think he’s lying to Wisconsin? Or have you been wrong about this?

            BTW…repeatedly referring to the company using terms like “slavery,” “evil” and “Mercenary” then complaining because another commenter called you “crapper” (once) makes you sound like a petulant child.

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          • Well capper if that’s true, those workers will then have the experience to possibly get a job at Three Guys and a Truck moving company. There will be no need for the state to provide any training. Whoda thunkit? Merc saving us tax dollar while packing up to move…BONUS!!!

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          • Capper?…Bueller?…Bueller?…

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