1,700 Mercury Marine employees affected by temporary layoffs

Roughly 1,700 workers will be hit by temporary layoffs at Mercury Marine in Fond du Lac, as the company responds to declining sales.

The layoffs come a little more than a month after Mercury Marine, a boat engine manufacturer, announced plans to cut 300 positions in June and July. At the time, the company said the layoffs would be accompanied by “adjustments to overall operations.”

This week, the company said it will shut down manufacturing for roughly six weeks between now and the end of the year “approximately one week at a time.”

“This will impact around 1,700 hourly employees,” Mercury Marine spokesperson Shelly Kuhn said via email. “This is taking place as a result of continued high interest rates and near-term reductions in boat production by Mercury’s boat builder partners.”

The company did not provide details on which positions were affected. As of Friday morning, neither Mercury Marine nor its parent company, Brunswick Corp., had filed a layoff notice with the state Department of Workforce Development for the layoffs announced last month. No notice had been filed regarding the temporary layoffs either.

According to WLUK-TV, hourly workers at one Fond du Lac plant are expected to have two-week “short-term layoffs” each month from July through October.  

WLUK reports some employees may be offered work in those windows, and others will be able to file for unemployment during those windows as well.

“These are not permanent layoffs, but days we are not manufacturing, which means the impacted employees are not working those days,” Lee Gordon, vice president of corporate communications, told the station. “It does impact the majority of our hourly population in Fond du Lac.”

The company has more than 3,000 employees in Fond du Lac, where it has both manufacturing facilities and corporate offices. In April, WGBA-TV reported more than 100 people had already been laid off at Mercury Marine this year.

In the first quarter of 2024, Brunswick Corp. reported net sales were down $378 million from the same period of last year.

Earlier this year, Racine County boat manufacturer BRP Inc. laid off nearly 300 workers at its plant in the village of Sturtevant. That company reported its revenues were down more than 16 percent in the first quarter.

What’s going on in the boat industry?

The sales declines for Mercury Marine and other manufacturers come as the industry cools off after it experienced a pandemic boom.

In 2020, powerboat sales in the United States reached a 13-year high with nearly 320,000 units sold, a level not seen in the recreational boating industry since before the 2008 Great Recession, according to the National Marine Manufacturers Association.

“There was a huge boom during COVID, when people didn’t have much else to do, money wasn’t going toward youth sports (or) big vacations,” said Adam Quandt, editor in chief of trade publication Boating Industry. “A lot of money went into boating.”

Now, Quandt says the industry is experiencing a period of “normalization” where sales have slowed as normal activities and vacations have resumed.

Sales remained strong in 2021. But the following year, new recreational boat sales were down 13 percent from the prior year to 266,206, according to the National Marine Manufacturers Association.

The association estimates new powerboat retail sales were down slightly again in 2023 to 258,000 units and predicted recreational boating sales would stay roughly flat in 2024.

“In any industry, it is hard to put ourselves up against the numbers that we put up in COVID just because it is such an anomaly,” Quandt said. “With that in mind, I think it’s more of a normalization than a huge slowdown.”

Corey Bodenbach is the sales manager at Lakeside Marina, an Oshkosh boat dealer that sells mostly recreational boats. He said inflation and high interest rates have been a double whammy for those interested in purchasing a boat.

“A boat you you were able to purchase in 2020 was $50,000 and a monthly investment on something like that was $400 a month,” he said. “Well, that boat is now $65,000, and with where (interest) rates are at, it’s almost $700 (or) $800 a month to buy that same exact boat.”

Bodenbach said many dealers also increased their inventory during the strong sales period of the pandemic. He also said many dealers are still working to sell that existing stock.

“When you have that inventory that you’re trying to move through, you’re not exactly excited to sit here at the computer and click the order button on more and more products,” he said. “Because you’re just going to get yourself more and more kind of buried of sorts in that financial commitment.”

Despite some high-profile layoffs this year, Wisconsin’s labor market has remained strong. In June, the state set new record highs for employment and total nonfarm jobs, while the unemployment rate remained near record lows at 2.9 percent, the state Department of Workforce Development announced Thursday.