The devastation that could have been

Adding up the potential economic, public funding and philanthropic losses if Mercury would have left Fond du Lac

Story by Lee Marie Reinsch

 VACANT NEIGHBORHOODS. Foreclosed houses with knee-high lawns. Restaurant hostesses leaning against walls on Friday nights, as heaps of perch fillets in the kitchen go unfried. Bar stools sitting unocccupied, as former regulars realize it’s cheaper to indulge in a drink at home.

This nearly apocolyptic scenario is the spectre that many feel might have become reality for Fond du Lac and the communities surrounding it had one of the city’s most well-established employers relocated to Oklahoma.

That nearly happened after a late August announcement by Mercury Marine officials that they would close down and relocate all Fond du Lac operations within two to three years.

“Mercury Marine is an anchor in the community,” said Sandi Roehrig, executive director of the Fond du Lac Area Foundation. “If we would have lost them, we wouldn’t have just lost Mercury Marine, we would have lost other firms that provide services for Mercury Marine.”

And not just a few others.

Fond du Lac County Economic Development Corp. President Brenda Hicks-Sorensen said Mercury Marine’s departure would have caused a domino effect on almost 6,000 jobs in Fond du Lac County that would be lost because of their dependence on Mercury Marine.

The FCEDC estimates that Mercury’s relocation would have affected 8,000 jobs regionally, and 11,000 jobs across the state, Hicks-Sorensen said.

“It would be a negative ripple effect – the beginning of a downward spiral for our economic community,” Roehrig said.

Countywide, around 250 companies provide services or products for Mercury Marine, and all would have been affected by the loss in business Mercury represents.

The list consists of direct suppliers of materials and component parts to Mercury down to flower shops, caterers and painters.

Statewide, the number of companies that provide goods or services to Mercury is around 1,000, Hicks-Sorensen said.

“While we were obviously concerned with supply-chain businesses (which depend on Mercury Marine), we were really concerned about restaurants, health care, retail and other businesses that can’t export their products,” Hicks-Sorensen said.

ACH Foam Technologies in Fond du Lac is one of the supply-chain companies that would have felt the loss.

“We’re elated that they stayed,” said John Huempfner, executive vice president of ACH Foam Technologies.

ACH’s industrial division makes polystyrene patterns for casting aluminum engines and engine parts for Mercury Marine. Mercury has been one of its predominant clients for the past 15 years.

“Our situation is a bit unique. We provide a specialty product that is difficult to reproduce,” Huempfner said. “But make no mistake about it – we need Mercury. It’s critical to our business.”

Huempfner said he can’t speculate on what ACH Foam technologies might have done had Mercury left, because he doesn’t know.

“We may have had to relocate,” he said.

During the weeks and summer months of negotiations between Mercury officials, community leaders and labor union leadership, the mood around Fond du Lac felt bleak.

“You could feel it in the air,” said Bob LeMense, owner of Pump & Pantry convenience store across the street from Mercury Marine headquarters. “It would have been pretty depressing if they moved; it would have affected the whole city.”

LeMense said he’s not sure his store would have been any more or less affected by a potential loss of Mercury Marine than any other businesses in town, but he would have felt it.

“It would definitely have affected us,” LeMense said. “Right now, though, there is enthusiasm and excitement in the air that they did sign (the re-negotiated agreement between the International Association of Machinists union and management) and that they’ll stay. We are all glad they are here. The city is very glad they’re here. I hope they stay here, and I hope the company honors what they say they’re going to honor.”

Public funding burden

WITHOUT MERCURY MARINE, Fond du Lac and the surrounding area would be a much different place than the community natives have known for the last 70 years.

“We were really concerned about declining real estate, water bills rising, that kind of stuff, especially if Mercury Marine followed its move of 800 jobs to Oklahoma with relocating its world headquarters there, as well,” said Hicks-Sorensen.

Mercury Marine’s loss to the community would have meant more than just a substantial loss of higher-than-average paying jobs. It would have meant a dent in local government coffers as the value of the property declined after years of sitting vacant. Mercury Marine pays around $620,000 in total annual property taxes, dollars that would have meant less revenue for institutions that depend on property tax money, such as the public school district and the local technical college.

And even the municipal water utility would have been substantially impacted.

“Mercury is our biggest water and sewer customer,” said Fond du Lac City Manager Tom Herre. “If they left, and nobody replaced them, we’d have to increase sewer and water rates by six percent.”

That translates to an extra $44 for the average home each year, Herre said.

Hicks-Sorensen said the FCEDC rarely releases information about the potential ramifications of such an economic loss, as it would hinder its efforts to promote the area as a viable place for new businesses to relocate.

But this time was different. Doing so helped the public be less shocked at the efforts – and ultimately better understand – the financial incentives offered to Mercury to keep its operations local, she said.

Loss of community wealth

THE FOUNDATION’S ROEHRIG points to the global collapse of financial institutions in 2008 as enough of a factor on its own to make Fond du Lac residents more cautious and conservative with their own money.

“I don’t know any family who hasn’t cut back,” Roehrig said. “People who used to eat out five nights a week are now only eating out two or three times a week.”

The possibility that Fond du Lac would be without Mercury Marine exacerbated an already tense situation, she said.

“I don’t think the average person thought that what happened in 2008 (the global financial collapse) was a possibility, and as that possibility came more and more apparent, people became more and more fearful. You had people losing 30 to 40 percent or more of their wealth, and Mercury (leaving) coupled with that could have been disastrous.”

Fond du Lac Area United Way Executive Director Tina Potter estimated Mercury Marine’s contributions to its annual campaign comprise around 15 to 20 percent of its overall intake.

“It’s a huge chunk,” she said.

The 17 human service organizations served by United Way assist 30,000 people in Fond du Lac County, about a quarter of them children, Potter said.

If Mercury Marine had left Fond du Lac, it would have dealt a serious blow to social and human service programs funded by United Way dollars.

“The board would be faced with making cuts in allocations, resulting in a reduction of services to people,” Potter said.

It would have come at an especially difficult time, she said, as the use of services funded partially by the United Way is up by about 25 percent.

“More people are using United Way services, and they are people who normally don’t seek help from United Way agencies,” Potter said.

That’s a crucial reason why United Way decided to increase its fundraising goal this year to $1 million from around $800,000 a year ago.

“Mercury Marine has always been a good partner and a good partner of the community. The loss would have been tremendous in so many ways,” Potter said.

The Fond du Lac Area Foundation supports 240 different philanthropic funds, and many of them would have felt the loss had Mercury moved its headquarters out of Fond du Lac. Mercury itself supports several of those funds, Roehrig said, but just as importantly, the company donates much of its expertise and other intangible resources to the community.

“They’ve been good about allowing their people to be on boards and help us by serving in leadership roles,” Roehrig said. “This would have been gone if we had lost Mercury Marine.”

Roehrig, who has served on a variety of boards of directors over the past 15 years, said boards are always looking for representation from different areas of the community.

“Mercury was always a given,” as far as representation on those boards, she said. “So we were lucky that Mercury Marine allowed that participation.”

No prospectus for Fond du Lac would be complete without a mention of its largest festival. Walleye Weekend depends on Mercury Marine’s sponsorship.

“The Merc National Fishing Tournament and Mercury Marine are the foundation of Walleye Weekend,” said Mary Ann Dilling, executive director of Fond du Lac Festivals, in a news release announcing the Mercury Marine National Fishing Tournament. “If it wasn’t for these two entities, we would not have been able to showcase the Fond du Lac community, along with this free family festival for so many years.”

The 31-year-old annual festival attracts up to 100,000 people per year.

And now that Mercury Marine has agreed to stay in Fond du Lac at least 12 more years, the tide is turning.

“I think it’s given Fond du Lac a ray of hope, a little optimism,” Roehrig said. “People are starting to lose that fear and think about life as it was before this.”

An alumna of Ripon College, Lee Marie Rensch is a freelance writer based in Green Bay.