The real story behind Mercury Marine's labor collapse

The question is being asked at dinner tables and water coolers throughout Wisconsin: Why would those union workers at Mercury Marine's Fond du Lac plant vote against the company's last contract proposal?

Why, indeed. At first glance, the consensus rejection by members of the International Association of Machinists and Aerospace Workers (IAMAW) Local 1947 on Sunday makes no sense. The company had flat-out threatened to leave Wisconsin for Stillwater, Okla., unless the Fond du Lac workers bent over and took substantial cuts in pay and benefits.

So, why would the Fondy workers cut their own throats? Isn't a job with reduced wages and benefits better than no job at all?

Why, indeed.

I will not try to justify the workers' vote. But I am happy to try to shed some light upon the mindset and the events that led to it.

The first thing to understand is the history that brought the Mercury Fond du Lac contract dispute to this point.

The company signed a contract extension through 2012 for the workers in Fond du Lac only last year.

"Now, they turn around and say, 'We need a complete rewrite, from cover to cover, of the contract THEY negotiated. It's union busting," said Mike King of the IAMAW. "When it's told to you across the table by a union-busting consultant (hired by the company), it really leaves a bad taste in your mouth."

In recent years, Mercury Marine had laid off about 600 people from the Fond du Lac plant and shifted production to China. The laid off employees could not participate in Sunday's contract vote.

The layoffs left the Fond du Lac plant with a senior-laden workforce. Most of the employees who still have jobs there have 25 to 30 years of experience at the plant. For many of them, retirement is on the near horizon.

Put yourself in their shoes. You are very near retirement. You are making a fine living wage. You have negotiated health care and pension benefits. The company is proposing a new contract that will slash your pay and eliminate most of your benefits, including severance pay for outgoing workers. The contract will cut benefits for retirees and will cut wages for new hires.

Even if the contract is rejected by the union, the company will need two to three years to move all of its production out of Fond du Lac to Oklahoma. If you can ride that time out, you'll walk away with the severance pay from the current contract. And then you can retire.

Or, you could take the figurative kick in the teeth -- a pay cut and loss of benefits, including severance -- and retire with less.

Union officials say the company's latest proposal is a "suicide offer."

Which option would you take?

"Mercury Marine never intended for this offer to be accepted," said IAMAW Midwest territory vice president Philip Gruber. "Despite progress on every major issue and a commitment by the IAM to continue bargaining, the company balked in the final hours and added terms and conditions that assured members would reject the offer ... Mercury Marine has been threatening these workers and this community for weeks. Some companies may hint at dire consequences as a bargaining tactic, but rarely do we see such extortion in plain view. It's unethical, it's un-American and I respect any worker who stands up and refuses to be bullied."

"They (company officials) knew these were deal-breakers. It's gut-wrenching. We really, really tried to work with them," King said.

Company officials say they already have begun the process of shifting the headquarters and production from Fond du Lac to Stillwater. Company officials said they will continue to abide by the terms of the contract they negotiated with the union last year.

The company says it is doing what it needs to do to survive in a global marketplace. The company says it must reduce its labor costs.

The company said it expects the full transition to Oklahoma to take between 24 and 36 months.

"We appreciate the patient support of our employees and communities as we've gone through this process," said Mark Schwabero, president of Mercury Marine. "This has been a very difficult and stressful process for all involved. We will work closely with our team in Fond du Lac to develop and communicate a transition plan for this 24-36 month process."

The company has said it will stand by its offer to the union until Saturday, Aug. 29. It's possible that an 11th-hour solution could emerge. But you best not hold your breath.

In the end, the company is doing what it believes it needs to do. So is the union. Unfortunately, that doesn't make the pain any less severe in Wisconsin.