Mercury Marine and Media: The Low Road

Media Rants

By Tony Palmeri

The nonpartisan think tank Center on Wisconsin Strategy (COWS) distinguishes between “low road” and “high road” business strategies. The low road “is associated with downward pressure on wages, increasing job insecurity, more outsourcing of work to low-wage regions, greater environmental damage, underinvestment in productive public goods, and resistance to public standards on private firm behavior.” The [unfortunately] less common high road “is associated with higher and more equal wages, better labor relations, more environmentally sustainable practice, greater investment in productive public goods, and affirmative support for public standards on the private economy.”

Sadly, low road management conduct has become a badger state occurrence every bit as common as beer and brats at a Packer tailgate bash. In just the recent past, corporate cunning ended GM’s 100 year history in Janesville, Chrysler moved its engine work from Kenosha to Saltillo, Mexico, and we all know about private equity firm Cerberus’ contemptible closing of Kimberly Papers’ profitable mill.

In terms of sheer guile and gross bullying, it would be hard to find an example of low road posturing more outrageous than Mercury Marine’s recent extraction of huge concessions from International Association of Machinists (IAM) workers at the company’s Fond du Lac plant.

Let’s review the facts: in July, management of the boat engine maker Mercury Marine announced that unless union workers agreed to reopen a recently negotiated contract and accept concessions, the company would close operations and move manufacturing jobs and the corporate offices to Stillwater, Oklahoma. The proposed concessions, which union officials claim were non-negotiable, included 170 changes to the contract, most notably a seven year wage freeze, 30% pay cuts for new hires, and equal cuts for laid off workers brought back. The IAM, for its part, offered to accept pay cuts until the easing of the recession, on the condition that the company provide a written commitment to keep the jobs in Fond du Lac. Mercury rejected the offer without giving it any serious consideration.

On August 23, IAM workers voted to reject Mercury’s demands. Mercury immediately announced an intention to move to Stillwater, but left open the door for the union to vote again for the same package of concessions. On August 29, after intense pressure from the general public and media, the union voted again but failed to get the results in by Mercury’s deadline. A third vote finally yielded acceptance of the concessions. Mercury subsequently received $53 million in incentives from the city and county of Fond du Lac to keep jobs in the area. The county’s incentive package will be financed by a half-cent increase in the sales tax. The company also received an “aggressive” aid package from the state, part of which is designed to assist Mercury in moving jobs from Stillwater to Fond du Lac.

The most charitable thing that could be said of corporate media coverage of the Mercury affair is that it was worthless. Print and broadcast media enabled Mercury’s low road strategy by minimizing or flat out ignoring the very blatant labor violations taking place.

Indeed, sane commentary and reporting on the Mercury situation could only be found in the blogosphere. Writing in his Fighting Bob blog, Ed Garvey wrote that, “It used to be illegal for a company to threaten to close or move jobs as a bargaining tactic . . . They (Mercury) were not negotiating. They were the third grade bullies threatening to take their ball and bat and go home. ‘My way or the highway.’”

By far the best reporting on Mercury was done by freelance Wisconsin writer Roger Bybee in the “Workers’ Rights” blog on the progressive magazine In These Times website. In the Mercury situation Bybee finds a typical and disturbing pattern:

Mercury officials are congratulating themselves for carrying out what has become a standard corporate game plan when shutting down a major plant. The two key elements of this plan typically include: (1) Inciting the public against the union by continually asserting that it is the workers, not the corporation, that are making the decision to close the plant. The workers' refusal of utterly unacceptable concessions is equated with stubbornness and a selfish unwillingness to consider the overall impact on the community--as if the workers themselves will have a bright future after the shutdown . . . (2) Portraying the workers' wages as astronomically high by comparing them with the regional average, conveniently limiting the frame to exclude the standards of skill and pay in the particular industry.

The Fox Valley Gannett papers were, as to be expected, uniformly awful in reporting and editorializing about Mercury. Gannett’s Fond du Lac Reporter, to its credit, did allow UW Oshkosh Human Resource Management Professor Barbara Rau to state the obvious: "Unions are being blamed for the economy, but how is that possible, when only 7.6 percent of the workers are unionized?"

Corporate media enabled Mercury’s low road strategy via shoddy and incomplete reporting and cowardly editorializing. Are more Merc-like messes on the way? Roger Bybee says it well: “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.”