Mercury Marine To Repay Oklahoma Tax Credits

OKLAHOMA CITY (AP) -- Boat engine maker Mercury Marine has told Oklahoma officials it will refund state investment tax credits now that it plans to move about 380 manufacturing jobs in Stillwater to eastern Wisconsin.

Mercury Marine announced plans to consolidate its manufacturing operations last week after union workers in Fond du Lac, Wis., agreed to wage and benefit concessions they had earlier rejected. The company had said it would shift work to Stillwater without the concessions.

Mercury Marine, the world's largest manufacturer of boat and recreational marine engines, revealed plans to refund the tax credits, with interest, on Tuesday in a letter from company President Mark Schwabero to Oklahoma House Speaker Chris Benge and other state lawmakers.

"I do appreciate the company for doing that," Benge, R-Tulsa, said Wednesday. "It's just the right thing to do."

The Legislature approved the tax credits last spring as an incentive for the company to relocate jobs to Stillwater. It authorized the credits as long as the company maintained certain employment levels, Benge said.

But with its plan to consolidate manufacturing operations, "it is unlikely that Mercury Marine will qualify for the criteria outlined by the bill in terms of minimum employment levels and the scale and scope of our operation in Stillwater," Schwabero wrote in the letter.

The legislation authorized up to $193,000 in tax credits over a five-year period, according to Jennifer Monies, Benge's press secretary. It gave the state the right to try to recover exempted taxes if the company closed its Oklahoma manufacturing plant before Jan. 1, 2012, but the company was not required to make a refund or pay interest, Monies said.

Mercury Marine said the refund will be paid no later than Sept. 14.

Last month, the company said it would move jobs from Wisconsin to a nonunion plant in Stillwater after members of the International Association of Machinists and Aerospace Workers Local 1947, which represents about 850 Wisconsin workers, overwhelmingly rejected the company's concession package.

At the time, Benge touted the state's "pro-growth business climate, low taxes, a skilled work force and a quality of life for Mercury Marine employees that is second to none" for the company's decision.

On Wednesday, Benge said he was disappointed the company changed its mind but that the development should not discourage Oklahoma officials from encouraging other employers to move to the state or expand existing operations.

"I think the way we act and carry ourselves when we lose is very important," the House speaker said. "You keep plugging away. I think Oklahoma may be the best kept secret in the nation when it comes to opening up a business. The work force is second to none. I think the work environment is very good and improving."

Mercury Marine also has manufacturing operations in Tulsa, Okla., as well as South Carolina, Florida, Mexico, Japan, United Kingdom, Belgium and China. It is a subsidiary of Lake Forest, Ill.-based Brunswick Corp.

More in Supply Chain