Wisconsin Workers’ ‘Victory’ is Oklahoma Workers’ Loss

Mercury Marine seemed poised to make a clean getaway from Fond du Lac, Wisconsin.

The company had written another version of a familiar script this summer: A corporation knowingly makes unjustified and unacceptable concessionary demands to a union without any job guarantees in return. The union understandably rejects the demand. And then the corporation heads off to the South, Mexico, or China, blaming the union's "inflexibility" for the shutdown.

Mercury nearly enacted this game plan in Fond du Lac, a central Wisconsin city of 42,000, located at the southern end of Lake Winnebago. At the beginning of the month, it tossed its Fond du Lac workforce of 850 International Association of Machinists (IAM) overboard and announced it was moving its operation to a non-union plant in the right-to-work state of Oklahoma.

But then the news came this week: Mercury's Fond du Lac plant would continue operating, helped along by a massive $53 million package of city and county subsidies.

Mercury, the maker of outboard motors, had been setting up its exit to Oklahoma for months, clearly intent on making IAM the fall guy. The company compiled an essentially non-negotiable list of more than 170 changes in the Machinists' contract, which did not expire until 2012. The corporation, for the first time, brought in a lawyer from a union-busting law firm to lay down the law.

The corporation's package of demands was clearly designed to be rejected. For example, Mercury not only wanted a 30% two-tier wage structure for new hires, but it also demanded that the 30% cut apply to long-term workers called back from layoff.

Among the most outrageous demands from Mercury Marine was a
seven-year wage freeze--even though the corporation repeatedly claimed
that it was not trying to take advantage of the current deep
recession.

Predictably, the corporation's demands were overwhelmingly rejected on Aug. 23. But workers and their families soon came under enormous pressure to reconsider, since Mercury has long been the largest employer and economic core of Fond du Lac.

Local economic development officials estimated that a total of 5,900 jobs in the area depended on Mercury. With virtually no alternative employment offering anything close to the $20-per-hour plus good benefits that a union contract meant at Mercury, the workers saw no future for themselves in Fond du Lac without Mercury jobs.

Many workers felt a deep internal split between the desire to reject the company's outrageous demands and an equally profound worry about their families' futures.

When the corporation set a deadline of midnight on Aug. 30 for workers to reconsider the same offer, the IAM tried to accommodate their members' desire to fully contemplate their decision with a second vote on the evening Aug. 30. Although the vote was under way, it was not completed by the midnight deadline.

But by that point, Mercury was already shifting into fourth gear. It announced that since the deadline was not met, it was going to be moving all the jobs to Stillwater, Oklahoma.

But a split within the union—entirely predictable when a corporation puts unbearable pressure on working families—resulted in yet a third vote last week. Workers approved the concessionary contract and—more decisively—Mercury walked away with a huge array of incentives from the state and localities.

It got $53 million in subsidies from Fond du Lac County and the city. It also received an "aggressive" package of incentives from the state, predicated on Mercury Marine maintaining at least 2,700 jobs in Fond du Lac for the next 12 years. That means that Mercury will be moving some 480 jobs from its Stillwater, OK plant to Fond du Lac.

Despite its demands for the concessions, Mercury and its parent company have remained profitable even during the severe recession, the Milwaukee Business Journal recently reported.

Meanwhile, the CEO of Mercury's parent company exempted himself from the concessions demanded by Mercury workers in Fond du Lac. As previously reported, CEO Dunstan E. McCoy raked in $9,334,343 in total compensation in 2008. In the previous year, McCoy made $8,623,206.

However, the decision to stay in Fond du Lac was very bad news for the non-union workers in Stillwater, and hopefully provided a lesson in how corporations use inter-state and international competition for jobs to create a "race to the bottom." Corey Williams, a Democratic state representative for Stillwater, described the picture perfectly:

The company's actions have pitted one community and one workforce against the other under false pretenses.

Mercury Marine clearly has no intent of relocating in Stillwater; its only real intent is to squeeze the union at its Wisconsin plant. I am especially upset with how the company's Stillwater employees are being treated in this process. They have worked hard for a company that is now refusing to respect that service. We want good corporate citizens in Oklahoma, not shakedown artists. Mercury Marine is dangerously close to becoming the latter.

In this game of pitting worker against worker and community against community, no one wins on either end. In Wisconsin, the workers were forced into massive concessions and taxpayers also had to shell out subsidies to a major, profitable corporation. The non-union Stillwater workers are losing their jobs in the midst of a recession and discovering precisely how powerless they are in a society dominated by global corporations.

Displaying both his stunning ignorance and arrogance, former South Dakota Representative Bruce Janklow once described the interstate competition for jobs as "the highest form of free enterprise."

How can giving taxpayer dollars to private corporations be "free enterprise"? How does luring jobs from one state to another increase rather than simply rotate the already-existing supply of jobs?

In reality, the pointless bidding war between states costs about $50 billion annually, according to Greg LeRoy, author of The Great American Jobs Scam.

Until we put an end to this race to the bottom, we will see many more bottom-feeders like Mercury Marine manipulating states and even nations against each other.