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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Gov. Evers Plans $31 Million For Marinette Marine Improvements

Issue Date: January 31, 2019

Newly inaugurated Wisconsin Governor Tony Evers visited the Fincantieri Marinette Marine Shipyard in Marinette on Thursday, Jan. 24 to officially announce that he intends to include $31 million for infrastructure improvements for the shipyard and the Menominee River harbor area in his Wisconsin state budget for 2019-2020.

The state funding, which is contingent on Marinette Marine's receipt of additional federal funds, will allow Marinette Marine to make additional improvements to expand its shipyard infrastructure and compete for a $10 billion federal shipbuilding contract.

According to an official statement from Fincantieri Marinette Marine, the shipyard expansion will ensure that Marinette Marine not only maintains a workforce of 1,500 employees, but can add an additional 400 full-time positions.

"Marinette Marine is a source of pride for Wisconsin, and employs thousands of Wisconsinites in good- paying, family-supporting jobs. Their success is an essential part of the Marinette community and local economy," said Governor Evers. "This partnership is a win for workers, a win for Marinette, and a win for Wisconsin. We look forward to supporting Marinette Marine's efforts to win this contract and to their continued success for years to come."

"On behalf of the 2,500 people that enter Fincantieri Marinette Marine every day, and the nearly 200 Wisconsin suppliers currently supporting our operations, I would like to express our gratitude for the Governor's commitment to the ongoing partnership between our shipyard and the State of Wisconsin. We share in his vision to continue the vitality of ship production and stable job growth in Wisconsin, " said Jan Allman, President and CEO of Fincantieri Marinette Marine. "We look forward to working with the Governor and all members of the legislature to get this across the finish line as part of the state budget."

Allman had accepted Evers' invitation to serve as one of the five members of his transition team after he was elected governor in November. Formerly Wisconsin Superintendent of Public Instruction, Evers was officially sworn in as governor on Monday, Jan. 7.

Marinette Marine has been building ships for the United States government and other customers since World War II and since 2005 has been one of two companies building littoral combat ships for the United States Navy. However, the Navy is discontinuing the LCS in favor of a larger frigate class ship next year, and to launch those ships several changes are needed at the Marinette shipyard, including an alternative to the sidewise launch with which vessels built there are currently launched into the Menominee River.

Marinette Marine is in the running for construction of the new ship, according to a statement issued by Rep. John Nygren of Marinette. Nygren serves as co-chair of the Wisconsin Legislature's Joint Finance committee. Nygren is a Republican and Gov. Evers is a Democrat.

"Early last week, I met with Governor Evers to emphasize the enormous role Marinette Marine plays in Wisconsin's economy as well as invite him to visit the harbor. Less than ten days later, Governor Evers accepted the invitation and announced his commitment to invest in Marinette Marine," Nygren stated on his legislative website. Nygren was with Gov. Evers when the funding announcement was made to a crowd of Marinette Marine workers and members of the press at the shipyard.

Nygren said he was pleased that Governor Evers has committed to making Marinette Marine a priority in his 2019-21 budget. "This investment will help Marinette Marine continue to be a player on the world stage for years to come. It is critical to make investments in our shipbuilding industry to maintain its competitive edge," Nygren declared.

"With over 160 suppliers around the state, an employment impact of over 5,400 jobs, and a $4.4 billion economic impact in northeastern Wisconsin alone, it's clear how much Marinette Marine means to Wisconsin. It also speaks to how much Wisconsin stands to lose if Marinette Marine falls behind.

He said since 2005, Marinette Marine has been building the Freedom-variant Littoral Combat Ship (LCS) for the United States Navy. The U.S. Navy has announced plans to discontinue procurement of the LCS and replace it with a larger Frigate Class ship in 2020. Five teams received initial design awards to construct the Frigate and Marinette Marine is a part of two of those teams. The state's investment is critical step in helping the shipyard win the contract for construction of the Frigate.

"This is not just important to Northeastern Wisconsin but important for Wisconsin as a whole. I would like to thank Governor Evers for recognizing the need to invest in northeastern Wisconsin's economy and accepting my invite to visit Marinette Marine," Nygren's statement concluded.

State Sen. Dave Hansen, a Democrat, also was pleased with Evers' announcement. He said in addition to the 1,500 employees who work there the shipyard supports hundreds of contract companies and thousands of their workers.

"Marinette Marine makes the best ship in the world ," Hansen said,adding that he was extremely happy to see that Gov. Evers "not only agrees, but is willing to invest in the improvements we need to win the Navy's next big contract, so we can continue building ships here for years to come."

In January of 2018 Allman had come to Marinette County Board to explain the pending contract opportunities and seek their help in financing the improvements that would be needed to build and launch the larger frigate type ships.She asked for County Board help in getting $15 to $20 million of local funding to help the firm get another Navy contract that would add some 400 new jobs to the 1,500 people already working at the Marinette shipyard, which the previous summer had celebrated its 75th year of shipbuilding in Marinette. Allman presented impressive figures on the firm's economic contributions to the area. She noted that it takes a strong community commitment for a small industry in a small community to last that long.

Allman said they needed about $100 million for the improvements, and were seeking $50 million in funds from state and local governments.

Allman said in addition to the 400 new jobs that will be directly created the contracts have the potential to create over 3,000 additional indirect jobs in this community and beyond. Currently the payroll, with 67 percent of employees living in Wisconsin and 33 percent in Michigan, brings $460 million each year in gross wages, and provides business for 800 major suppliers in 43 states.

Since 2009, when LCS construction began, Fincantieri has added 700 new jobs and spent over $103 million on new buildings in Marinette, doubling their indoor work space and adding other infrastructure improvements. They now have 6 acres of buildings on the site. An average of 2,500 people enter their gates each day, Allman said. They are certified by the Navy as secure site, and were saluted by the US military for being among the top facilities in the nation in terms of security for their operations.

In March of 2018, after nearly two hours of intense discussion, Marinette County Board declined to support an initial resolution that could have led to loaning $50 million to Fincantieri Marinette Marine. The resolution would have authorized a closer look at the possibility of helping finance $100 million of improvements at the shipyard to enhance its chances of obtaining at least one, and probably two, long-term shipbuilding contracts.

As explained by John LeFebvre and by Financial Advisor Jeff Belongia at a special board meeting on Tuesday, Jan. 22, had the loan gone forward, Fincantieri Marinette Marine would have been obligated to repay the amount borrowed plus all interest and all associated costs before the end of the seven-year Saudi contract, and the loan would have hinged on them getting that contract.

It had been described as a "bridge loan," to provide operating capital and funds for improvements to the shipyard facilities, the river channel into which the ships are launched and the harbor through which the ships enter and leave the Bay of Green Bay and Lake Michigan.

The board had been told that those improvements, including larger new launch equipment, would greatly enhance the firm's chances of being the successful bidder on a longer term contract to build the new FREM class of frigates that the United States Navy is planning to acquire in the coming decade or two.

Granting the loan was strongly backed by Marinette County Board Chair Mark Anderson and County Administrator John LeFebvre, but failed to gather the votes needed to make it a reality.

In December of 2018 Marinette Marine received a $5 million Wisconsin Department of Transportation grant to dredge the Menominee River channel to the depth needed for the new vessels.


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