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Author Topic:   Wisconsin Pays To Keep Mercury Jobs

jimh posted 10-10-2010 01:27 PM ET (US)
The State of Wisconsin recently announced it gave Mercury Marine $5,000,000 in incentives to leverage the company to create 200 new jobs in Wisconsin that Mercury Marine had originally intended to export to Mexico. Some sketchy generalities of the arrangement are given in this press release:
http://www.wisgov.state.wi.us/journal_media_detail.asp?prid=5308& locid=19
Interestingly, the budget of the State of Wisconsin is rated among the ten worst state budgets in the U.S., according to this newspaper article:
http://www.jsonline.com/news/milwaukee/69771807.html
One wonders how long state governments can continue to provide incentives to retain manufacturing operations.
Readers may recall that about one year ago, in September 2009, Mercury played off the states of Wisconsin and Oklahoma in a showdown over which of their plant facilities, Fond du Lac or Stillwater, would become the primary marine manufacturing facility. As the parties were pushed to the brink, Wisconsin prevailed over Oklahoma, a victory won at the cost of concessions from employees and incentives from the state. Mercury Marine is still in the process of moving their MerCruiser operation from Stillwater to Fond du Lac, and says the process should be complete in 2011.
This Tulsa newspaper article recounts the slow death of the Stillwater facility and the loss of about 380 jobs for that community:
http://www.tulsaworld.com/business/article.aspx?subjectid=48& articleid=20100818_46_E1_Mercur253192
WT posted 10-10-2010 01:58 PM ET (US)
Here is Brunswick's past performance.
1) Income statement for prior 3 years. Revenues have been cut in 1/2 from 2007 to 2009. Look at the "revenue" for each year and look at the losses in cashflow at the bottom.
http://finance.yahoo.com/q/is?s=BC+Income+Statement&annual
2) Balance sheet. Brunswick has a negative net worth.
http://finance.yahoo.com/q/bs?s=BC&annual
So if Brunswick continues on it's path of decreasing revenues and losing money it should close its doors.
I don't blame Brunswick for wanting to reduce its operating costs to stay alive. I hope they make it.
Maybe they should just shut down Mercury Marine because most of our participants on this website would never re-power their Boston Whaler boats with a Mercury product. And the participants here are very knowledgeable boaters which may represent the consensus of the marine re-power market.
So, should Mercury Marine just give up?
Warren
20dauntless posted 10-10-2010 04:15 PM ET (US)
Should Mercury Marine just give up?
Nope. I probably would not buy a Mercury product, but I think the competition in the outboard engine marketplace is good for consumers.
Regarding Jim's post, incentives are regularly used by governments to encourage economic growth. If the government is doing its job well, the incentives should work out favorably for both sides.
martyn1075 posted 10-10-2010 05:20 PM ET (US)
I'm not surprised and I feel for the workers in the US specifically the facility production line workers who don't make much for their efforts but put money in the pockets for the big boys at the top. Its much like Ford all over again. I have owned older Mercury models and currently own Mercury because they came with my boat and I can't afford to re power right now. I am certain I would not buy one new at least not for a long time or maybe never because the silly little problems I have endured just cut too deep IMO.
Companies have to be real careful how the treat customers who are paying the bills. When folks pass over their hard earned money for hugely expensive products such as engines it better be good or as close to what the company claims. If its not, make it right for them at any cost to keep them happy. Recognize fault... and do the right thing and many will return. If a company doesn't do the right thing, the customer will never forget and therefore will be lost perhaps for good. I thinks its as simple as that. If they stand by their product now is irrelevant to the years they did not. It makes a huge deal in economical crisis that we are all in. Numbers will probably always be down but what about the ones lost, and are not returning when needed the most. Thats where it hurts right now.
Perhaps not recognizing or giving enough credit to the new technologies that were emerging before their eyes has been another thorn in their side. Rather then shutting down completely and tossing in the white towel I would like to see them get back into it. Perhaps the best thing for Mercury would be to start much smaller, work with their die hard clients and design a engine that is completely different from the others. Really test it make sure it works!!!! The overseas companies did this many years ago (four stroke) and now look at them. What they have done is cleverly planned and well mastered business over the years. Don't be fooled it wasn't a fluke. I wish Mercury the best of luck perhaps they will be number one again but its not that easy in many forms of the word business.

Stevebaz posted 10-10-2010 06:23 PM ET (US)
Wisconsin believes paying corporate welfare is creating jobs needs new leadership. First of all those 200 jobs already exist so no new jobs are being created. If there is regulation issues making it unfair for Mercury to compete on its own 2 feet then the state should change the regulations so Mercury can compete fairly not bribe them to stay. I have no faith in Mercury’s ability to make a profit on American labor if that is the current predicament they find themselves in. Last week I went into Bass Pro and bought what I believe were first quality Mercury primer bulbs. I bought 2 Mercury part number 13330Q07 bulbs believing that they were American made, high quality and a much better part than I have bought in the past from other makers. I paid about 3 dollars more each for these bulbs and they are much better quality but they are not made in USA, they are made in Mexico. It says so right on the box. Now a primer bulb is a simple Item mostly made from injection molded parts and takes very little unskilled labor to assemble one of these units. If Mercury can't organize American labor to the point of making primer bulbs they sure as hell can't manufacture such a complicated outboard here. If there is so much money to be made for 15 minutes of labor that they can ship products and material across international borders and sell them here for a profit I don't think they need government welfare. Obviously there is much more money being made by selling a sob story that there is selling outboards.
WT posted 10-10-2010 06:47 PM ET (US)
Wisconsin is doing everything it can to retain/increase jobs so that its cities do not turn into a DETROIT.
WT posted 10-10-2010 07:24 PM ET (US)
Stevebaz, you live kind of close to Long Beach, California. How do you feel about losing 550 Boeing jobs that are moving to Oklahoma?
http:/ / okc. biz/ article/ 09-23-2010/ Boeing_brings_more_jobs_opportun ities_to_metro_by_relocating_two_major_programs. aspx
But the spin is that California is creating jobs. We are hiring people for Walmart, Target and other retail positions at minimum wage. But we lose jobs that are paying $60-90K.
I wonder why corporate tax revenues have dramatically dropped in California?
Anyway, the greedy corporations that are taking advantage of its workers continue to cut overhead.
Warren
elenakagan posted 10-10-2010 07:42 PM ET (US)
"Anyway, the greedy corporations that are taking advantage of its workers continue to cut overhead."
Warren
Maybe the 'GREEDY CORPORATIONS" should increase overhead, give everybody a raise so that way they can remain competitive.

Better yet, let the 'GREEDY' corporations just lay everybody off, that way Mr.Obama and Mrs. Pelosi can hire them as census takers or create some other high paying government positions.
jimh posted 10-10-2010 09:42 PM ET (US)
Re the cost of creating a modern manufacturing job in the United States, it appears to me that each job requires an investment of about $1-million in capital. I have been following announcements of new plant facilities, and it is more typical that a modern manufacturing plant that will employ 200 people will cost about $200-million to build.
If Wisconsin can create 200 manufacturing jobs with an investment of only $5-million, they would be getting a bargain.
WT posted 10-10-2010 09:59 PM ET (US)
In today's market one would not buy a single family lot to build a home due to the economics. Not many businesses willing to build new plants when they can buy below reproduction costs.
Brunswick sells a former Bayliner plant for $1.5 million.
http://www.tradeonlytoday.com/home/ 506608-brunswick-sells-former-bayliner-plant
martyn1075 posted 10-11-2010 02:40 AM ET (US)
The articles here are good and to the point, but I'm afraid spending money on these plants would end up being a waste of time unless of course they use it to develop a better product then the leaders and not so much to create jobs etc.
The problem here is they need money to stay alive not so much to stay ahead...
Do you see the difference? I would rather see them use money to develop a better product but I don't believe they need to increase jobs to do that. Its more about a new development team with a completely new way of thinking. A fresh outlook and marketing plan to gain back the customer. I don't think they seem themselves there quite yet and thats been the problem for years.

Stevebaz posted 10-11-2010 12:38 PM ET (US)
WT,
Since you asked I don’t really care that Boeing is moving 550 jobs to Oklahoma, funny that they can't make it work in California but can in another state. Job movement out of state is something California has done its best at creating. I run a manufacturing shop in the Los Angeles area I have been in manufacturing for over 35 years and the movement of jobs out of our state is and has been pushed by California’s legislature leading the way of the future. If all states had to endure what a manufacturing company in California has to pay and put up with just to keep the doors open there would be no manufacturing in this country. No one is going to invest their hard earned cash to build a company just to be beat to death in fees and taxes and an ever changing working environment. If I owned the company I work for it would have closed a long time ago or at least moved out to a more reasonable state. I know soon that I will be out of a job and looking for one of those precious Wal-Mart jobs too. Until this government gets on track and respects manufacturing and lets them do the job that’s needed we all loose. You invest your money to make a buck and let someone else tell you how to spend it and see how much more money your going to invest.
California was a leading state in this country and we are now leading the way to the bottom and if you think these legislated green jobs are a coming, you your way off base. All the equipment will be made out of state or shipped in from out of country.
dino54904 posted 10-11-2010 05:10 PM ET (US)
I know of no successful company that has as their goal to 'create jobs'. Their goals are to create and keep customers (market share, sales, revenue, etc) Additional jobs come as a result of creating and keeping customers. That being said I agree with Martyn when he wrote that Wisconsin should be assisting with Mercury's new product development process so they can make a product that will result in a larger customer base (market share)which will result in more sales that will generate additional jobs. Everything stems from the demand there is for your product. If tax incentives, bail outs, grants, etc. don't result in a more desirable product that produces additional sustained sales the incentive or bailout will be a short term solution that does not result in the creation of additional jobs.
At to WT's comments - Corporations are supposed to be greedy. That is what motivates them to invest in new and better products, so they can capture additional market share, generate revenue and grow...which means additional jobs.
WT posted 10-11-2010 10:32 PM ET (US)
I'm an owner/investor in 8 different businesses that employs hundreds in California. Don't get me started....
Warren
Newtauk1 posted 10-11-2010 11:17 PM ET (US)
Interesting times we live in. Big business, oh by the way what makes this country run, is in neutral right now. They are waiting from some signs to start gearing up. They want some confident "speak" from the White House. Nothing good coming out of the White House. Lots of quality people leaving at a record pace. Perhaps we should give Michigan to Canada. Unload lots of unproductive people, factories and crappy sports teams.
sdwhaler17 posted 10-12-2010 01:23 AM ET (US)
I have a Toyota truck and am buying a Yamaha to re-power a Yamaha... However I'd buy a Ford today, they are reinventing themselves and didn't take the bailout. If Mercury turned a corner like that, I'd buy one of those today too...
martyn1075 posted 10-12-2010 02:08 AM ET (US)
Well as a Canadian I would love to get some of those crappy hockey teams back to Canada where they once originated before going way south in bad markets, but please keep the slackers out! LOL
jimh posted 10-12-2010 09:06 AM ET (US)
I do not think Mercury Marine has any manufacturing operations in California or Michigan. Perhaps ATTWOOD, another Brunswick subsidiary has operations in Michigan. Mercury Marine may have a warehouse or distribution operation in California. I don't think these businesses are particularly germane to the discussion.
If we assume that the 200 new jobs that result from Wisconsin's investment of $5-million will each pay a wage of $35,000 per year, and if we assume these jobs will last for ten years, then a total of $70,000,000 in wages will result. At an income level of $35,000 per year, the income tax rate in Wisconsin is 6.5-percent. We may assume that the state will recover $4,550,000 in income tax. Wisconsin also has a 5.5-percent sales tax. If we assume at least one-quarter of the income will be spent on taxable items, Wisconsin could recover an additional $962,500 in sales taxes. So in ten years or less, Wisconsin should recover its $5-million investment in taxes.
In addition, it is often cited that manufacturing wages create additional economic activity by a factor of 1.5. If we inflate the $70-million in wages by a factor of 1.5, then Wisconsin should recover its $5-million investment even faster.
When a state government gives certain businesses rewards or incentives it is playing favorites. Perhaps there are other businesses in Wisconsin which would like to receive $5-million from the state. Who decides which business gets the gift of this money? Mercury seems to have learned how to manipulate state government. In playing off Oklahoma and Wisconsin, they were able to make themselves recipients of free money from the state. Who is to say that of all the businesses in Wisconsin that Mercury Marine was most deserving of investment from the State of Wisconsin? Who will pick and choose the businesses to receive these benefits?
prj posted 10-12-2010 10:36 AM ET (US)
The State of Wisconsin is indeed playing favorites by selecting which companies it is willing to throw financial backing behind. Of course, the decision is made based upon the relative size and impact the company has in the state, measured by employment, revenue, tax base or some other metric. I assume that the decision is made in concert by the governor, the legislature with the assistance and prodding of the local government most affected, i.e. a mayor and the council.
Mercury Marine is a significant Wisconsin based company and therefore, received significant backing.
Harley-Davidson was next to put their hand out to both the workers and the State. As an iconic brand and significant employer in Milwaukee and up North, the State came through for them as well, to the tune of up to $25 million in tax credits.
http://www.jsonline.com/business/103135249.html
Next in line will be The Kohler Company, a privately held manufacturer of plumbing fixtures and small engines, a significant hospitality group and a major patron of the game of golf. They've gone to the workers first, of course, but I expect they are quietly negotiating with the State as well to quelch concern about Kohler's threat to move production elsewhere.
20dauntless posted 10-12-2010 01:06 PM ET (US)
Jim, as I'm sure you know, many (most?) large companies employee lobbying firms as advocates. I'd guess that Brunswick employed lobbyists on their behalf to get this subsidy. Additionally, it would be interesting to see how Brunswick and its' executives support political candidates. I don't have time to look now, but go to www.opensecrets.org and do some searching to see if there were sizable contributions to the current crop of leaders in Wisconsin.
pcrussell50 posted 10-13-2010 03:11 AM ET (US)
California has one thing going for it: people want to live here so badly, they are willing to take it in the shorts, to do so. That includes at least some small-to-mid-sized manufacturers. And the state legslators know it. If you don't want to play their game? "Good riddance. This state is overpopulated anyway, and the rest of us will be better off without you.
The part in quotes is my paraphrase of our state legislators' collective attitude(s).
-Peter
cohasett73 posted 10-13-2010 12:04 PM ET (US)
More Wisconsin money spent to promote business.
http://www.wisn.com/money/25371743/detail.html
Tom from Rubico,WI
WT posted 10-14-2010 02:11 AM ET (US)
So which way is right?
Wisconsin entices businesses to hire more people to generate more tax revenues for Wisconsin.
California imposes more fees and taxes on existing businesses to generate more revenues for California.
I think Wisconsin has it right.
Warren
prj posted 10-14-2010 11:30 AM ET (US)
The answer to that question, WT, depends upon the economic climate at the time. Wisconsin's solution may be proper and correct in this difficult climate as the corporations arguably have the upper hand in negotiations.
I'd suggest that in boom times, these negotiations wouldn't be happening and the State would have the upper hand in any regulatory or incentive matter.
L H G posted 10-14-2010 11:43 AM ET (US)
I think Wisconsin got off cheap with Mercury, and it has created 200 more jobs. Quebec had to give BRP $50,000,000. about a year ago to keep them out of trouble, and it probably didn't create any new jobs.
All of this is nothing when compared to what the US has given to GM and Chrysler, some $80,000,000,000.
Tom W Clark posted 10-14-2010 12:39 PM ET (US)
I though we were supposed to discuss Boston Whaler boats on this site and avoid political bickering.
Who's the knucklehead that started this thread?
L H G posted 10-14-2010 01:22 PM ET (US)
Tom, Jim has always spoken highly of you!

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Author	Topic: Wisconsin Pays To Keep Mercury Jobs
jimh	posted 10-10-2010 01:27 PM ET (US) The State of Wisconsin recently announced it gave Mercury Marine $5,000,000 in incentives to leverage the company to create 200 new jobs in Wisconsin that Mercury Marine had originally intended to export to Mexico. Some sketchy generalities of the arrangement are given in this press release: http://www.wisgov.state.wi.us/journal_media_detail.asp?prid=5308& locid=19 Interestingly, the budget of the State of Wisconsin is rated among the ten worst state budgets in the U.S., according to this newspaper article: http://www.jsonline.com/news/milwaukee/69771807.html One wonders how long state governments can continue to provide incentives to retain manufacturing operations. Readers may recall that about one year ago, in September 2009, Mercury played off the states of Wisconsin and Oklahoma in a showdown over which of their plant facilities, Fond du Lac or Stillwater, would become the primary marine manufacturing facility. As the parties were pushed to the brink, Wisconsin prevailed over Oklahoma, a victory won at the cost of concessions from employees and incentives from the state. Mercury Marine is still in the process of moving their MerCruiser operation from Stillwater to Fond du Lac, and says the process should be complete in 2011. This Tulsa newspaper article recounts the slow death of the Stillwater facility and the loss of about 380 jobs for that community: http://www.tulsaworld.com/business/article.aspx?subjectid=48& articleid=20100818_46_E1_Mercur253192
WT	posted 10-10-2010 01:58 PM ET (US) Here is Brunswick's past performance. 1) Income statement for prior 3 years. Revenues have been cut in 1/2 from 2007 to 2009. Look at the "revenue" for each year and look at the losses in cashflow at the bottom. http://finance.yahoo.com/q/is?s=BC+Income+Statement&annual 2) Balance sheet. Brunswick has a negative net worth. http://finance.yahoo.com/q/bs?s=BC&annual So if Brunswick continues on it's path of decreasing revenues and losing money it should close its doors. I don't blame Brunswick for wanting to reduce its operating costs to stay alive. I hope they make it. Maybe they should just shut down Mercury Marine because most of our participants on this website would never re-power their Boston Whaler boats with a Mercury product. And the participants here are very knowledgeable boaters which may represent the consensus of the marine re-power market. So, should Mercury Marine just give up? Warren
20dauntless	posted 10-10-2010 04:15 PM ET (US) Should Mercury Marine just give up? Nope. I probably would not buy a Mercury product, but I think the competition in the outboard engine marketplace is good for consumers. Regarding Jim's post, incentives are regularly used by governments to encourage economic growth. If the government is doing its job well, the incentives should work out favorably for both sides.
martyn1075	posted 10-10-2010 05:20 PM ET (US) I'm not surprised and I feel for the workers in the US specifically the facility production line workers who don't make much for their efforts but put money in the pockets for the big boys at the top. Its much like Ford all over again. I have owned older Mercury models and currently own Mercury because they came with my boat and I can't afford to re power right now. I am certain I would not buy one new at least not for a long time or maybe never because the silly little problems I have endured just cut too deep IMO. Companies have to be real careful how the treat customers who are paying the bills. When folks pass over their hard earned money for hugely expensive products such as engines it better be good or as close to what the company claims. If its not, make it right for them at any cost to keep them happy. Recognize fault... and do the right thing and many will return. If a company doesn't do the right thing, the customer will never forget and therefore will be lost perhaps for good. I thinks its as simple as that. If they stand by their product now is irrelevant to the years they did not. It makes a huge deal in economical crisis that we are all in. Numbers will probably always be down but what about the ones lost, and are not returning when needed the most. Thats where it hurts right now. Perhaps not recognizing or giving enough credit to the new technologies that were emerging before their eyes has been another thorn in their side. Rather then shutting down completely and tossing in the white towel I would like to see them get back into it. Perhaps the best thing for Mercury would be to start much smaller, work with their die hard clients and design a engine that is completely different from the others. Really test it make sure it works!!!! The overseas companies did this many years ago (four stroke) and now look at them. What they have done is cleverly planned and well mastered business over the years. Don't be fooled it wasn't a fluke. I wish Mercury the best of luck perhaps they will be number one again but its not that easy in many forms of the word business.
Stevebaz	posted 10-10-2010 06:23 PM ET (US) Wisconsin believes paying corporate welfare is creating jobs needs new leadership. First of all those 200 jobs already exist so no new jobs are being created. If there is regulation issues making it unfair for Mercury to compete on its own 2 feet then the state should change the regulations so Mercury can compete fairly not bribe them to stay. I have no faith in Mercury’s ability to make a profit on American labor if that is the current predicament they find themselves in. Last week I went into Bass Pro and bought what I believe were first quality Mercury primer bulbs. I bought 2 Mercury part number 13330Q07 bulbs believing that they were American made, high quality and a much better part than I have bought in the past from other makers. I paid about 3 dollars more each for these bulbs and they are much better quality but they are not made in USA, they are made in Mexico. It says so right on the box. Now a primer bulb is a simple Item mostly made from injection molded parts and takes very little unskilled labor to assemble one of these units. If Mercury can't organize American labor to the point of making primer bulbs they sure as hell can't manufacture such a complicated outboard here. If there is so much money to be made for 15 minutes of labor that they can ship products and material across international borders and sell them here for a profit I don't think they need government welfare. Obviously there is much more money being made by selling a sob story that there is selling outboards.
WT	posted 10-10-2010 06:47 PM ET (US) Wisconsin is doing everything it can to retain/increase jobs so that its cities do not turn into a DETROIT.
WT	posted 10-10-2010 07:24 PM ET (US) Stevebaz, you live kind of close to Long Beach, California. How do you feel about losing 550 Boeing jobs that are moving to Oklahoma? http:/ / okc. biz/ article/ 09-23-2010/ Boeing_brings_more_jobs_opportun ities_to_metro_by_relocating_two_major_programs. aspx But the spin is that California is creating jobs. We are hiring people for Walmart, Target and other retail positions at minimum wage. But we lose jobs that are paying $60-90K. I wonder why corporate tax revenues have dramatically dropped in California? Anyway, the greedy corporations that are taking advantage of its workers continue to cut overhead. Warren
elenakagan	posted 10-10-2010 07:42 PM ET (US) "Anyway, the greedy corporations that are taking advantage of its workers continue to cut overhead." Warren Maybe the 'GREEDY CORPORATIONS" should increase overhead, give everybody a raise so that way they can remain competitive. Better yet, let the 'GREEDY' corporations just lay everybody off, that way Mr.Obama and Mrs. Pelosi can hire them as census takers or create some other high paying government positions.
jimh	posted 10-10-2010 09:42 PM ET (US) Re the cost of creating a modern manufacturing job in the United States, it appears to me that each job requires an investment of about $1-million in capital. I have been following announcements of new plant facilities, and it is more typical that a modern manufacturing plant that will employ 200 people will cost about $200-million to build. If Wisconsin can create 200 manufacturing jobs with an investment of only $5-million, they would be getting a bargain.
WT	posted 10-10-2010 09:59 PM ET (US) In today's market one would not buy a single family lot to build a home due to the economics. Not many businesses willing to build new plants when they can buy below reproduction costs. Brunswick sells a former Bayliner plant for $1.5 million. http://www.tradeonlytoday.com/home/ 506608-brunswick-sells-former-bayliner-plant
martyn1075	posted 10-11-2010 02:40 AM ET (US) The articles here are good and to the point, but I'm afraid spending money on these plants would end up being a waste of time unless of course they use it to develop a better product then the leaders and not so much to create jobs etc. The problem here is they need money to stay alive not so much to stay ahead... Do you see the difference? I would rather see them use money to develop a better product but I don't believe they need to increase jobs to do that. Its more about a new development team with a completely new way of thinking. A fresh outlook and marketing plan to gain back the customer. I don't think they seem themselves there quite yet and thats been the problem for years.
Stevebaz	posted 10-11-2010 12:38 PM ET (US) WT, Since you asked I don’t really care that Boeing is moving 550 jobs to Oklahoma, funny that they can't make it work in California but can in another state. Job movement out of state is something California has done its best at creating. I run a manufacturing shop in the Los Angeles area I have been in manufacturing for over 35 years and the movement of jobs out of our state is and has been pushed by California’s legislature leading the way of the future. If all states had to endure what a manufacturing company in California has to pay and put up with just to keep the doors open there would be no manufacturing in this country. No one is going to invest their hard earned cash to build a company just to be beat to death in fees and taxes and an ever changing working environment. If I owned the company I work for it would have closed a long time ago or at least moved out to a more reasonable state. I know soon that I will be out of a job and looking for one of those precious Wal-Mart jobs too. Until this government gets on track and respects manufacturing and lets them do the job that’s needed we all loose. You invest your money to make a buck and let someone else tell you how to spend it and see how much more money your going to invest. California was a leading state in this country and we are now leading the way to the bottom and if you think these legislated green jobs are a coming, you your way off base. All the equipment will be made out of state or shipped in from out of country.
dino54904	posted 10-11-2010 05:10 PM ET (US) I know of no successful company that has as their goal to 'create jobs'. Their goals are to create and keep customers (market share, sales, revenue, etc) Additional jobs come as a result of creating and keeping customers. That being said I agree with Martyn when he wrote that Wisconsin should be assisting with Mercury's new product development process so they can make a product that will result in a larger customer base (market share)which will result in more sales that will generate additional jobs. Everything stems from the demand there is for your product. If tax incentives, bail outs, grants, etc. don't result in a more desirable product that produces additional sustained sales the incentive or bailout will be a short term solution that does not result in the creation of additional jobs. At to WT's comments - Corporations are supposed to be greedy. That is what motivates them to invest in new and better products, so they can capture additional market share, generate revenue and grow...which means additional jobs.
WT	posted 10-11-2010 10:32 PM ET (US) I'm an owner/investor in 8 different businesses that employs hundreds in California. Don't get me started.... Warren
Newtauk1	posted 10-11-2010 11:17 PM ET (US) Interesting times we live in. Big business, oh by the way what makes this country run, is in neutral right now. They are waiting from some signs to start gearing up. They want some confident "speak" from the White House. Nothing good coming out of the White House. Lots of quality people leaving at a record pace. Perhaps we should give Michigan to Canada. Unload lots of unproductive people, factories and crappy sports teams.
sdwhaler17	posted 10-12-2010 01:23 AM ET (US) I have a Toyota truck and am buying a Yamaha to re-power a Yamaha... However I'd buy a Ford today, they are reinventing themselves and didn't take the bailout. If Mercury turned a corner like that, I'd buy one of those today too...
martyn1075	posted 10-12-2010 02:08 AM ET (US) Well as a Canadian I would love to get some of those crappy hockey teams back to Canada where they once originated before going way south in bad markets, but please keep the slackers out! LOL
jimh	posted 10-12-2010 09:06 AM ET (US) I do not think Mercury Marine has any manufacturing operations in California or Michigan. Perhaps ATTWOOD, another Brunswick subsidiary has operations in Michigan. Mercury Marine may have a warehouse or distribution operation in California. I don't think these businesses are particularly germane to the discussion. If we assume that the 200 new jobs that result from Wisconsin's investment of $5-million will each pay a wage of $35,000 per year, and if we assume these jobs will last for ten years, then a total of $70,000,000 in wages will result. At an income level of $35,000 per year, the income tax rate in Wisconsin is 6.5-percent. We may assume that the state will recover $4,550,000 in income tax. Wisconsin also has a 5.5-percent sales tax. If we assume at least one-quarter of the income will be spent on taxable items, Wisconsin could recover an additional $962,500 in sales taxes. So in ten years or less, Wisconsin should recover its $5-million investment in taxes. In addition, it is often cited that manufacturing wages create additional economic activity by a factor of 1.5. If we inflate the $70-million in wages by a factor of 1.5, then Wisconsin should recover its $5-million investment even faster. When a state government gives certain businesses rewards or incentives it is playing favorites. Perhaps there are other businesses in Wisconsin which would like to receive $5-million from the state. Who decides which business gets the gift of this money? Mercury seems to have learned how to manipulate state government. In playing off Oklahoma and Wisconsin, they were able to make themselves recipients of free money from the state. Who is to say that of all the businesses in Wisconsin that Mercury Marine was most deserving of investment from the State of Wisconsin? Who will pick and choose the businesses to receive these benefits?
prj	posted 10-12-2010 10:36 AM ET (US) The State of Wisconsin is indeed playing favorites by selecting which companies it is willing to throw financial backing behind. Of course, the decision is made based upon the relative size and impact the company has in the state, measured by employment, revenue, tax base or some other metric. I assume that the decision is made in concert by the governor, the legislature with the assistance and prodding of the local government most affected, i.e. a mayor and the council. Mercury Marine is a significant Wisconsin based company and therefore, received significant backing. Harley-Davidson was next to put their hand out to both the workers and the State. As an iconic brand and significant employer in Milwaukee and up North, the State came through for them as well, to the tune of up to $25 million in tax credits. http://www.jsonline.com/business/103135249.html Next in line will be The Kohler Company, a privately held manufacturer of plumbing fixtures and small engines, a significant hospitality group and a major patron of the game of golf. They've gone to the workers first, of course, but I expect they are quietly negotiating with the State as well to quelch concern about Kohler's threat to move production elsewhere.
20dauntless	posted 10-12-2010 01:06 PM ET (US) Jim, as I'm sure you know, many (most?) large companies employee lobbying firms as advocates. I'd guess that Brunswick employed lobbyists on their behalf to get this subsidy. Additionally, it would be interesting to see how Brunswick and its' executives support political candidates. I don't have time to look now, but go to www.opensecrets.org and do some searching to see if there were sizable contributions to the current crop of leaders in Wisconsin.
pcrussell50	posted 10-13-2010 03:11 AM ET (US) California has one thing going for it: people want to live here so badly, they are willing to take it in the shorts, to do so. That includes at least some small-to-mid-sized manufacturers. And the state legslators know it. If you don't want to play their game? "Good riddance. This state is overpopulated anyway, and the rest of us will be better off without you. The part in quotes is my paraphrase of our state legislators' collective attitude(s). -Peter
cohasett73	posted 10-13-2010 12:04 PM ET (US) More Wisconsin money spent to promote business. http://www.wisn.com/money/25371743/detail.html Tom from Rubico,WI
WT	posted 10-14-2010 02:11 AM ET (US) So which way is right? Wisconsin entices businesses to hire more people to generate more tax revenues for Wisconsin. California imposes more fees and taxes on existing businesses to generate more revenues for California. I think Wisconsin has it right. Warren
prj	posted 10-14-2010 11:30 AM ET (US) The answer to that question, WT, depends upon the economic climate at the time. Wisconsin's solution may be proper and correct in this difficult climate as the corporations arguably have the upper hand in negotiations. I'd suggest that in boom times, these negotiations wouldn't be happening and the State would have the upper hand in any regulatory or incentive matter.
L H G	posted 10-14-2010 11:43 AM ET (US) I think Wisconsin got off cheap with Mercury, and it has created 200 more jobs. Quebec had to give BRP $50,000,000. about a year ago to keep them out of trouble, and it probably didn't create any new jobs. All of this is nothing when compared to what the US has given to GM and Chrysler, some $80,000,000,000.
Tom W Clark	posted 10-14-2010 12:39 PM ET (US) I though we were supposed to discuss Boston Whaler boats on this site and avoid political bickering. Who's the knucklehead that started this thread?
L H G	posted 10-14-2010 01:22 PM ET (US) Tom, Jim has always spoken highly of you!