Monday, September 7, 2009

The Real Losers In The Mercury Marine Affair

Unless you live in a cave or under a rock, you have heard that the union at Mercury Marine in Fond du Lac managed to get a third vote on the collateral (damage) contract to keep their jobs.

It is hard to say if the union did the right thing or not, since it is painfully obvious that we are not being told the whole story. We probably never will know the entire story either. What we do know is that the union agreed to massive concessions including wage cuts for new or rehired employees. We also know that the union conceded to taking hits on their health care coverage and to a no pay freeze agreement which lasts seven years.

We also know that the City and County of Fond du Lac are also planning on giving MM a ton of corporate welfare to help sweeten the deal even further for the company.

In exchange, MM is stating that not only keep the company in FdL, but that they are going to close their Oklahoma plant and move those jobs up here. There is no word if this is part of the contract agreement that was just ratified.

Being up north over the weekend, the news was more newsy and less commentary as it is down here. Some of the things that I had heard was that the company did alter the proposal to some degree, to clarify language or something, I would presume, before the third vote. I also learned that some of the equipment in the FdL plant is highly specialize and expensive, and would have been very difficult and costly to move to Oklahoma, making it less appealing, especially if the unions gave in even just a little.

I will not condemn the union for voting the way they did, since all of the details are unknown at this time. They made their choice and now we will have to wait and see what the actual end results are going to be. If there is not specific language in the contract, there is little to keep them here if they seriously considering a move again in the future. This would mean that the unions slit their own throats for nothing.

As the right likes to point out, even a crappy job is better than no job. However, I do think that the unions are getting the shaft by having to agree to a seven year contract. The economy does seem to be improving, even if rather modestly. It is difficult to believe that things won't be getting better in a year or two, leaving the company to reap more profits but slowly financially strangling the workers. But the unions aren't the biggest losers in this to do.

The citizens in Stillwater, Oklahoma are also losers due to the fact that, if what MM is claiming is indeed true, they will all be out of work soon. Brew City Brawler and Jay Bullock are both correct in pointing out that the non-union workers in Oklahoma lost in no small part due to the fact that they weren't able to have the impact of several hundreds of union members working together. But even though they were unable to or unwilling to work as one to save their jobs, and now are going to be unemployed, the people in Stillwater are not the real losers. Even though their situation is bad, very bad, they at least know where they stand.

The real losers in this deal are the people of Fond du Lac. The store owners and other business people were terrified of what would happen if MM left the state for Oklahoma. Not only would the workers be out of their income, but the businesses that cater to the workers would lose money due to the MM employees not having the cash to spend.

The store owners and business people of FdL are counting on the workers going out and spending freely again. This is not a likely scenario, as that even if the current workers do get to keep their full wages, they are probably going to be too gun shy to make anything but the absolutely necessary ones. The new workers or recently rehired workers will also not be able to do much to support the local economy as they are paying off bills that they accrued during their layoffs, especially for the ones of whom have been laid off for several months. Their ability to dig themselves out will only be hampered by the fact that they also will be collecting 30% less money.

Not only will the people of FdL have to deal with the shrunken money flow, but they are going to get hit twice as they lose services and/or pay higher taxes due to the money the city and county will be dishing out to sweeten the deal for MM.

I admit that I don't know how I would have voted if I were in their shoes. As I said at the beginning of this post, we don't have all the details of what was proposed and counter-proposed between the company and the unions nor do we know what is in the contract that was ratified.
I also am not willing to make some offhand comment about their vote since we already know that things appear much different when it is your family's future on the line as opposed to some stranger's.

I think almost everyone would agree that Mercury Marine was the biggest winner in this whole shebang. They were able to successfully pit these two communities against each other to maximize any benefits they could get.

I also recognize that almost everyone would agree that the people of Fond du Lac, and of Wisconsin as a whole, are winners since the jobs not only appear to be staying here for now, but there is supposedly going to me a few hundred jobs added as they move their Oklahoma operations here.

But considering what the unions and the citizens of Fond du Lac are giving up, I sometimes wonder if people will still consider it a win a few years down the road, or if this in indeed just a Pyrrhic victory.


  1. We'll see down the road. As I told you on land line yesterday, there are a lot of boats for sale, so MM is likely hurting like the stated. Hopefully, things improve down the road, and when the next contract comes up for negotiation, they can recoup some of the losses they're taking. I think they made the right choice for now.

  2. I think the biggest sticker for me is the length of the contract. MM arbitrarily chose to modify a contract one year into it. I don't think that they would recognize the union the same way in a year or two when the economy recovers.

    A shorter length would have made it much more palatable. If the economy is still bad, they can extend it as it is, but if it gets better, the workers get the shaft.

  3. I can't argue that. I hope it doesn't turn out that way. As for changeing the contract, it's the same with P & G. They can cancel their end of the deal and put it up for bid any time they want. Sucks. But then, I knew that going in.