Monday, August 24, 2009

Mercury Marine — The Contract

One thing that is serving as a source of friction in discussing the Mercury Marine situation is in understanding what Mercury proposed and what they did not.

I have seen a number of misunderstandings of this contract and in fact I had a key misunderstanding up until the day of the vote.

The one that had me blinkered was the notion that Mercury Marine (MM) was offering a three year stay in Fond du Lac (FDL) guarantee. One needs to recall, the driving force behind this is MM's desire to consolidate facilities.

Currently, MM has a facility in Stillwater OK producing their IO engines (Their MerCruiser line) and the headquarters, their parts and accessories central warehouse, and their medium to large outboard engine manufacturing in Fond du Lac.

When I was under the notion that the guarantee was only for three years I also forgot the party about consolidation. This had me thinking MM was setting the union up to be a patsy in this. However, if the union approved the contract the carrot was to bring the MerCruiser line to FDL. How much sense does it make to move a plant from Stillwater to FDL and then say "Now, that we are all settled here in FDL, we will move to XYZ". It does not. So, this guarantee was much more solid and substantial than I had thought and others continue to think.

There are a number of people claiming the contract contained a huge pay cut. Partly true. New hires and those returning from layoff were going to get hit with the pay cut, which amounted to something like 65-70% of the current average wage. There are some people characterizing the pay cut as being company wide, it is not.

There are other items in the contract too regarding medical insurance and the retirement plan. MM wanted the employees to pay for more of their insurance and to transition away from a pension style retirement plan to a 401K style plan.