Mercury Marine and its labour union are negotiating a new labour contract that could result in higher wages. The current contract was signed in 2014 and runs through 2021, but a tight labour market in its Fond du Lac, Wisconsin headquarters was among several reasons why the company and union are negotiating early.

The Fond du Lac Reporter said that Mercury and the International Association of Machinists and Aerospace Workers (IAM) Lodge 1947 have reached a "tentative" agreement on a new contract, though terms were not released.

"Mercury and its labour union have been in discussions, working to strengthen its partnership to ensure its leadership position in the marketplace and community today and into the future," wrote Lee Gordon, Mercury’s director of public relations and communications, in a statement.

Ben Elizondo, business representative with IAM Lodge 1947, said a tight labour market in Wisconsin has left companies scrambling for workers. He told the paper that negotiations could lead to higher wages for Mercury's employees in Fond du Lac. That could help the company attract and retain more workers. The company currently has 75 open jobs on its websites. Fond du Lac's unemployment rate was 3% in August. It has not risen above 5%, considered full employment, since June 2015.

Elizondo said the new contract negotiations are a step toward "rebuilding" the union's relationship with the company after Mercury threatened to move to Stillwater, Oklahoma in 2009. Mercury stayed in Fond du Lac, taking a US$53m incentive package from state and local officials.

The number of workers at its Fond du Lac facility has grown from about 1,900 in 2009 to more than 3,200 last spring. The company has also invested about US$800m in its Fond du Lac campus, including the addition of the largest diecast press in North America.

Elizondo told the paper that union officials are optimistic that they will be able to reach a deal. "To their credit, they have dumped a lot of money into their plant in Fond du Lac," Elizondo told the paper. Union members are expected to vote on the new contract in about a week.