Despite being denied a US $10 million dollar loan earlier this week by the Fond du Lac County, Mercury Marine says it will continue its US $30 million expansion plans at its Fond du Lac, Wisconsin facility, albeit on an extended timetable.
"It doesn't change the plans of what we'll be doing at all but it will change the pace at which we will accomplish those plans,' explains Steve Fleming, Mercury Marine's Director of Communications. "While we'll still be purchasing the equipment that the loan could have helped us secure, we'll do so at a less accelerated pace.'
The two projects Mercury was hoping to use the loan towards included high-pressure die cast equipment for one expansion facility and machining at a second. "Those buildings are almost complete now,' says Fleming. "The loan would substantially have gone towards buying the high-cost machinery that goes in those two facilities. It will also slow down somewhat the hiring of additional individuals.'
Other than delaying equipment purchases for its expansion projects, Mercury says the denied loan will have no impact on its other business or sustainability targets. Fleming says Mercury plans to gradually purchase the desired equipment based on product demand from the industry.
The proposed loan was appealing to Mercury Marine for several reasons according to Fleming. "The County has access to funds at a very attractive interest rate,' he explains. "An additional attraction for the loan is a clause that would have seen the County forgive a portion for the loan for every person we hired, up to 300 people. There could have been as many as 300 new employees tied to that loan, which would have resulted in Mercury receiving US $1,000 per person in forgiveness.'
Fleming says a similar clause was included in the previous US $50 million loan Mercury received from the County in 2009, which prevented the engine manufacturer from moving its operators to Oklahoma.