For Marinette Marine Corp., one of the largest shipbuilders on the Great Lakes, 2009 has been the year its ship finally came in.

This was true in a literal sense in March when the U.S. Navy, after more than a year of tough negotiations with the northeastern Wisconsin shipyard and its partner, Lockheed Martin Corp., awarded a $460 million contract to build the USS Fort Worth, the third in a series of new Littoral Combat Ships. “Littoral” means the vessels will operate close to shore. The LCSs are a major part of the U.S. Navy’s shift in emphasis from Cold War, deep-sea operations to focus on near-shore counter-terrorism and anti-piracy missions. The medium-size LCSs fit with Marinette Marine’s niche as one of the nation’s pre-eminent builders of ships under 500 feet in length. The company also built the first ship in this class, the USS Freedom, launched in 2006.

The contract for the 377-foot USS Fort Worth came just in time to keep Marinette Marine, with a work force of 860 and 140 on layoff, from having to lay off another 200 employees in March and April.

“This gives us stability through 2010 for our current work force,” says Richard McCreary, Marinette Marine Corp.’s president, CEO and general manager.

But perhaps more important for the future of Marinette Marine, 2009 was also the year Fincantieri Marine Group LLC, a $4 billion Italian shipbuilder, acquired Marinette Marine along with Bay Shipbuilding Co. in Sturgeon Bay from the Manitowoc Co.

Fincantieri, based in Trieste, Italy, is one of the world’s largest groups in the design and construction of naval and merchant ships. It produces everything from submarines to aircraft carriers to cruise ships. In Italy, Fincnatieri employs 9,400 at eight shipyards, two design centers, a research center and two production sites. More than 10,000 additional employees work for Fincantieri supply-chain firms.

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There are definite advantages to being owned by Fincantieri, according to McCreary.

“It’s important to have a prosperous parent company,” he notes. “They promised to bring the shipyards [in Wisconsin] up to world-class standards, allowing them to compete both domestically and internationally for business.”

To that end, the Italian parent company has already begun investing more than $100 million in improvements to be completed over the next four years at Marinette and at Bay Shipbuilding. Anticipated projects at Marinette include:

• An extension of the building in which the LCS ships are constructed so that the whole ship can be erected indoors (currently 70 feet of the ship extends outside the huge building on the Menominee River);

• New pipe-bending machines;

• Larger cranes in the construction and outfitting building;

• New entirely indoor paint and blast facilities.

With affiliation with Fincantieri, Marinette Marine also gains access to the designs and technology of the company, which is heir to more than 200 years of the great tradition of Italian shipbuilding. Fincantieri’s core business is construction of complex ships with high technological content and it is the reference builder for a wide range of vessels. In contrast, Marinette Marine and other shipbuilding venues made up only about 5 percent of the Manitowoc Co.’s business.

The LCSs are smaller, faster and more nimble than the vessels designed for the Cold War era, McCreary says. LCS ships built by Marinette Marine can travel at 45 knots (52 mph) and can turn 360 degrees in less than eight boat lengths at sprint speed. They will have three principal missions — counter-mine, anti-submarine and surface warfare. The ships will be able to interdict ships on the high seas, conduct surveillance and reconnaisance and provide transportation and protection for special operating forces.

One of the most important features of the LCSs, McCreary says, is their modular design, which allows them to be re-configured for different missions in one day. An LCS Class Squadron has been formed in San Diego to operate the ships. Each LCS will have a crew of about 40.

The Navy anticipates building as many as 55 LCS ships in the coming years, indicating a bright future for Marinette Marine and other medium-size shipbuilders.

The LCS ships are being built with two radically different designs by competing defense contractor groups. The Lockheed Martin Corp. team, which includes Marinette Marine and Bollinger Shipyards of Louisiana, is building LCSs with a semi-planing, single, steel hull and an aluminum superstructure.

“They look more like a conventional warship,” McCreary says.

In contrast, General Dynamics; Bath Iron Works and Austral USA in Mobile, Ala., are teaming to build the less conventional USS Independence, the second ship in the LCS class. The Independence has an aluminum trimaran hull, which should allow it to travel at sustained speeds of nearly 50 knots (60 mph).

This design, however, may be problematic.

“There are some questions about the stability of this ship for use on the high seas,” says McCreary.

The Navy has plans to award contracts for 10 more LCSs in the 2010 fiscal year, which started Oct. 1. Either Lockheed Martin or General Dynamics would receive contracts for all 10 ships, McCreary says. If Lockheed Martin wins the contracts, the first new contract would go to Bollinger; the second to Marinette Marine. McCreary says his updated shipyard would be capable of building another LCS ship at the same time the USS Fort Worth is under construction. Such an eventuality would likely call for increases in the company’s active work force.

Military history

Marinette Marine, a $250 million company, was founded in 1942 to build ships for use in World War II. It was privately held until 2000, when it, Bay Shipbuilding and other facilities were purchased for $48 million by the Manitowoc Group. Manitowoc sold the shipyards to Fincantieri for approximately $120 million.

The company’s first contract in 1942 was for five wooden barges. Since then it has constructed more than 1,300 military and commercial vessels, including U.S. Coast Guard icebreakers and buoy tenders, Navy mine-sweepers, ferries, dredges and tugs.
The company’s peak employment of about 1,200 came about two years ago. However, it has had to cut its work force as three major military contracts were winding down, McCreary says. One of the largest was a $405 million contract with the U.S. Navy for 41 floating barges for the unloading of cargo from ships.

After a career of more than 25 years at shipyards on the Gulf Coast, McCreary, a graduate of the University of Michigan’s Department of Naval Architecture and Marine Engineering, came to Marinette Marine in April 2005.

“It was a tremendous opportunity,” he says of becoming CEO at Marinette, although he admits Marinette winters are “a little daunting.” “Winter is not my favorite season.”

He’s enthusiastic about the inherent strengths and abilities of the company.

“We have an extremely capable work force and great technical staff,” he says of Marinette Marine. Under his leadership, the company has continued to bid for many government contracts.

Full speed ahead

In August, U.S. Rep. Steve Kagan, D-Appleton, whose district includes Marinette County and the congressman for the Upper Peninsula of Michigan, U.S. Rep. Bart Stupak, D-Menominee, announced that $4 million is earmarked in the 2010 defense budget for reserch at Marinette Marine on hull technology. The research would help in developing new hulls that would allow ships to travel faster with greater fuel efficiency. It could create as many as 45 jobs for engineeers and technicians.

Marinette Marine also has combined with the Boeing Co. to bid for the contract for the Navy’s Landing Craft Air Cushion, a large hover craft capable of carrying a main battle tank to shore at speeds close to 50 knots, McCreary says. Other bids have gone for a fishing supply vessel for the National Oceanic and Atmospheric Administration, an ocean-going research vessel for the

U.S. Navy and an Alaska regional research ship for the National Science Foundation.

Affiliation with Fincantieri could bring opportunities to bid for commercial ships and vessels of foreign countries, McCreary says. One of the better opportunities could be for oil field service ships.

Don Clewley, executive director of the Marinette County Association for Business and Industry Inc., terms the LCS contract and prospects for Marinette Marine “very positive.” He says the LCS contract was particularly important for Marinette County because it came at a time when several area employers tied to the auto industry were making significant layoffs. The improvement at the shipyard could create jobs for 50 to 100 construction workers.

And the impact of Marinette Marine’s success is felt far beyond Marinette County. Shipyard employees commute as far as 70 miles to work. Forty to 50 percent of the work force travels across the border from Upper Michigan. A group of UP employees even shares a bus to make the commute.
In addition, the shipyard has some 200 subcontractors, mostly in Wisconsin and Michigan, McCreary says. So as more and more shipbuilding business comes to Marinette Marine, the multiplier effect helps the economies of both states.

By John Hill

You can contact John Hill by e-mail at jhoythill@sbcglobal.net.

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