Dramatic Downturn in Boating Industry Forcing Difficult Decisions

Continuing economic dificulties facing the boating industry is forcing the Brunswick corporation to make hard decision's relative to their production & assembly operations at their Mercury Marine facilities in Fond du Lac, WI. 

 

Following the union's rejection of contract concessions requested by the company, Mercury Marine will immediately begin to shift the majority of operations from Fond du lac, WI to Stillwater, OK.

 

Loss of some 2,000 jobs will would cause a ripple effect in WI business.  

 

 

 

 

In spite of recent optimistic signs seen in aspects of the global economy, the recreational and commercial boating industry is continuing to deal with the effects of a continuing downturn.  Unlike past recessions, the current malaise is causing a fundamental shift in the boating industry and the associated engine makers, with dramatic changes being felt by management, employee unions and suppliers, as well the consumer alike. The International Association of Machinist and Aerospace workers and Union, for Mercury Marine, Fond du lac was forced to make a difficult decision as to acceptance of new contract where the company was requesting dramatic changes to a four-year contract it had signed a year-ago.  The union representing some 900 workers recently rejected the company’s new offer. The rejection of the contract will now mean a move of production operations to a non-union plant in Oklahoma. Companies like Mercury, in Fond du lac, WI, where unions have a had a lond-standing relationships, are now in a survival mode. There has been a steady erosion of employment at the Fond du Lac facilities due to slow boat sales and the poor economy. Two years ago, nearly half of Mercury Marine’s 6,400 workers worldwide were employed in Fond du Lac. In 2008, hundreds of jobs were cut and production shut down for three weeks. With the now eminent move to their MerCruiser operations in Stillwater, OK, the shutting down of the Fond du Lac, operations would mean an annual loss of some $353 million in workers earnings and additional some 7,000 lost jobs due to the impact on suppliers, movement and other business operations throughout WI. The changes occurring in Fond du lac, WI and that of Mercury Marine will have likely have profound effect on not only the economy of WI, but will also be closely watched by other corporations in similar industries facing the effects of a continuing recession. Stepping back and looking at all sides of the equation; it is very difficult to see how the decisions being made in Fond du Lac, WI will not profoundly affect many other industries and local economies throughout the U.S. facing similar situations and also impacted by historical shift in the global economy 

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This author consults with leading institutions through GLG