During the period of negotiations between Mercury Marine and their employees, we’ve heard continuously of Mercury Marine’s dire financial straits. Out of curiosity, I viewed Brunswick’s quarterly report and what I found was surprising.
Mercury Marine did indeed have sales decrease over 40% from a year ago quarter and lost $7.8 million. While that sounds pretty serious, it doesn’t tell the whole picture. That loss of $7.8 million included restructuring charges of $9.6 million. Restructuring charges are one-time charges related to layoffs and worker buyouts. Often quarterly results are reported in financial media excluding one-time charges; since the charges happen once they don’t tell you much about the state of a business. If we take the very reasonable action of ignoring these $9.6 million one-time losses, Mercury Marine had a quarterly profit of $1.8 million. Let me reiterate, Mercury Marine had a PROFIT of $1.8 million in the second quarter. Mr. Schwabero didn’t mention to the media, community and the workers that Mercury Marine actually was profitable based on its operations. Did Mr. Schwabero do this to extract more painful concessions out of its workers and more generous government incentives? Mr. Schwabero, I challenge you to explain your reasoning for making your company’s financial situation seem worse than it really is.
Mercury Marine is proposing permanent wage and benefit reductions to cover a loss caused by one-time expenses. Additionally, the current financial situation is caused by a 43% downturn in outboard business versus a year ago. The market will improve substantially over the next few years. If Brunswick isn’t satisfied with Mercury’s quarterly profit $1.8 million, they can wait a few years; it’ll get better. A more equitable method of restructuring would have Mercury offer generous early retirement packages to their workers in order to reduce manufacturing capacity.
