Wisconsin residents were treated to some good economic news when President Barack Obama signed the $1.3 trillion omnibus spending bill into law this week. Included within that bill, thanks to the efforts of Sen. Herb Kohl (D-WI), was a contract for Marinette Marine, a shipbuilding company located on the Wisconsin/Michigan border, to build ten littoral combat ships (LCS) for the U.S. Navy at a price tag of $480 million per ship.
$5 billion contract
Marinette Marine, which currently has 850 employees, was forced to lay off 180 workers in recent months due to the time delay in getting this bill finalized. Now that the bill has been passed and signed into law, Marinette Marine will not only be able to recall all 180 employees that were laid off, but by July 2011, the company hopes to add an additional 1,000 employees to their payroll. The U.S. Navy will pay Marinette Marine roughly $5 billion for their services in building the ships.
Not only will this contract impact Marinette Marine, but it will also have an impact on those individuals and businesses that supply raw materials and logistical support to the company. In fact, according to a press release by Sen. Kohl’s office, the contract will infuse $2.5 billion and thousands of jobs into the local economy.
In a time of economic uncertainty, this development was welcome news for those involved. As published on JSOnline, James LaCosse, the littoral combat ship program manager at Marinette Marine, stated, “Once we have the contract, we will be able to work with our supplier base and get orders in place. We are going to be adding to the workforce as the project ramps up. We also have some people on furlough that will be called back to work.”
The U.S. Navy was also very pleased that Congress included the contract in the spending bill. As published on WBAY.com, Admiral Gary Roughhead, Chief of Naval Operations for the U.S. Navy, said, “I am very pleased and grateful Congress has enabled the Navy’s plan to add these needed ships to our Fleet. With peerless speed and maneuverability, the LCS is uniquely designed to win against 21st century threats in coastal waters posed by increasingly capable submarines, mines and swarming small craft. Both designs provide the capabilities our Navy needs, and each offers unique features that will provide fleet commanders with a high level of flexibility in employing these ships. This is good for the Navy, shipbuilders and taxpayers.”
Austal USA to build additonal ships
As part of the deal, Austal USA was also awarded a contract to build ten additional LCS for the U.S. Navy. Austal, which is based out of Mobile, AL, builds a more unconventional LCS than Marinette Marine. The Austal LCS has a narrow central hull, two outrigger hulls, and a support deck. The Marinette Marine model, however, has a much more conventional design with a single steel hull that is seen more commonly in ships today.
Once the ten ships are completed by Marinette Marine, the future looks bright for additional orders. As published on JSOnline, Loren Thompson, chief operating officer with the Lexington Institute, a military think tank based out of Arlington, VA, said, “Five or six years from now, when the Navy has a lot more experience with these two ships, it may make sense for them to settle on a single design. The problem with picking one design, today, is we don’t have any real war-fighting or operational experience with either one of these ships. My suspicion is that, eventually, the Navy will go with the Marinette version because I think the [Austal version] is a little too different and a little too challenging.”
Founded in 1942 and having over 1,500 constructed ships to its resume, Marinette Marine is excited about its LCS model. The ships, which are of great interest to the U.S. Navy for their versatility, offer several services that most traditional ships cannot. The LCS is used to hunt submarines and pirate vessels, defend ground troops, and to support unmanned aerial vehicles.
Sen. Kohl, who has served since four terms since being elected in 1988, is a member of the powerful Senate Appropriations Committee, which is the committee responsible for determining which projects receive federal funding. Up for re-election in 2012, Sen. Kohl has given no indication as to whether or not he wishes to seek a fifth term in the U.S. Senate.