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Mercury Marine meets with union

August 25, 2009 at 07:34 AM

WAUSAU, Wis. (AP) — Mercury Marine President Mark Schwabero has agreed to meet with leaders of the union that rejected a package of wage and benefit concessions the Fond du Lac boat engine maker says it needs to keep hundreds of jobs from moving to Oklahoma, a spokesman said Monday.

Tuesday’s meeting is at the request of International Association of Machinists and Aerospace Workers, Local 1947, said Steve Fleming, a spokesman for Mercury Marine, the largest employer in the eastern Wisconsin city of Fond du Lac.

“Mark is absolutely willing to sit down and hear what they have to say, but the essence of the (proposed) contract has to remain the same,” Fleming said in a telephone interview from Fond du Lac. “Nobody knows for sure what they are going to talk about.”

Union leaders did not immediately return telephone messages Monday.

The union reported Sunday that its 850 members overwhelmingly voted to reject what Mercury Marine called its final offer to rework a four-year labor contract signed a year ago. The company said the offer remains valid until midnight Saturday.

City Manager Thomas Herre said Monday that local governments have offered Mercury Marine a package of financial incentives to help the company develop new products and move jobs from elsewhere to Fond du Lac. The package requires the company to remain in town for at least 12 years.

That commitment may affect how union workers look at the deal Mercury Marine is proposing, he said.

“Both the company and the union have said they are willing to talk,” Herre said. “What that means, I am not quite sure. They both left the door open a crack for further discussion. I think it is hopeful.”

The company had said workers would see no pay cuts under its proposal, but the union said workers were asked give up 2 percent pay raises in each of the last two years of the contract. The average hourly wage now is about $20, the union said. The proposal also called for lower wages for new hires and workers called back from layoffs, and changes in work rules and pension benefits that the union considered unworkable.

After Sunday’s vote, Mercury Marine, the world’s largest manufacturer of boat and recreational marine engines, said it would move many of its Fond du Lac manufacturing operations to a nonunion plant in Stillwater, Okla., over the next two to three years.

An additional 900 jobs in the corporate headquarters were also at risk, the company said.

The company’s MerCruiser plant in Stillwater employs about 380 people.

Mercury Marine, founded in 1939 as Kiekhaefer Corp. of Cedarburg, also has manufacturing operations in Tulsa, Okla., as well as South Carolina, Florida, Mexico, Japan, United Kingdom, Belgium and China.

Mercury Marine, a subsidiary of Lake Forest, Ill.-based Brunswick Corp., has to reduce production capacity because sales have dropped 50 percent from a year ago and any recovery could take years, Fleming said Monday.

“The marine industry is going to crawl out of that recession,” he said. “There is talk the industry will never reach where it was before. If you don’t take appropriate actions now, you won’t be here.”

Fleming said Mercury Marine union workers have a history of rejecting company proposals on the first vote.

“This was about, ‘Hey, listen. This is what we have to do to become competitive and here’s a way to get there.’ This wasn’t an us-versus-them, squeeze out as much as you can,” he said. “The contract is based on what is necessary to be competitive.”

While townspeople may have been shocked that workers rejected the revised contract with so many jobs on the line, company executives and administrators were more disappointed than surprised, Fleming said. Trust between the union and management was not destroyed, he said.

“We were making engines Friday when we left for the weekend and we are still making engines today,” he said.

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