Fincantieri is proposing to leverage its experiences gained in North America, including work on the US Navy Littoral Combat Ship (LCS) program, as part of its bid for the Sea 5000 future frigate program in Australia.
The company is competing with BAE Systems Australia and Navantia for Sea 5000, a decision for which is expected in the first half of 2018. It is proposing a version of its fregata europea multi-missione (FREMM) design, based on the Anti-Submarine Warfare (ASW) variant in service with the Italian Navy.
“We have created a sustainable business in the US; the company is a fully American company run by Americans,” explains Fincantieri Australia chairman Dario Deste. “This is exactly what we’re proposing to do in Australia.”
Created in 2008, Fincantieri Marine Group LLC has three shipbuilding facilities in Wisconsin, on the shores of Lake Michigan and employs a total of over 2,300 people, in addition to over 650 contractors and a further number of suppliers.
In September Fincantieri Australia announced that it had placed pilot orders with Australian industry, including Hofmann industries, Calibre and Blue Scope Steel and that it will build three hull blocks for cruise ships in Australian shipyards, irrespective of the Sea 5000 outcome.
Fincantieri Marine Group LLC
Fincantieri currently has 20 shipyards around the world and considers its operations in Italy, Romania and the US as its domestic markets. In the US, Fincantieri Marine Group (FMG) is the parent for Fincantieri Marinette Marine (FMM), Fincantieri Bay Shipbuilding (FBS) and ACE Marine.
Fincantieri Marinette Marine currently builds the Freedom class LCS in partnership with Lockheed Martin and has so far delivered five ships from its Marinette yard. Since 2008 the parent company has invested over US$120 million in the yard and has doubled indoor production space to 556,000 square feet (51,654 square metres).
Fincantieri Bay Shipbuilding, based in Sturgeon Bay Wisconsin, constructs commercial vessels, including offshore support vessels and articulated tug and barge units. It also conducts repair and conversion of vessels for the US Coast Guard.
ACE (Aluminium Center of Excellence) Marine is based in Green Bay Wisconsin and, as its name suggests, specialises in Aluminium construction. It is the builder of the US Coast Guard’s Response Boat-Medium boats and today builds aluminium superstructure modules for the Freedom LCS program.
Today a board member of FMG, Jennifer Granholm was the Governor of Michigan in 2008 and, together with her counterpart in Wisconsin, was instrumental in attracting Fincantieri investment in ailing local shipyards. The upper peninsula of Michigan shares a border with Wisconsin and a significant percentage of workers in the Marinette yard cross the Menominee River each day from Michigan.
In 2008, Granholm says Michigan had ten million people and was the automotive industry powerhouse in North America.
“In 2008, when Fincantieri was contemplating coming over, was right at the start of the global recession and in Michigan we are so reliant on the manufacturing sector. When the auto industry went bankrupt it was preceded by all the suppliers to that industry going bankrupt,” she said.
“We had a whole focus on getting foreign direct investment into Michigan, with the added focus on where we could really add value and the notion of having an advanced shipbuilder right on our border. We wanted them to employ locally, to invest locally, be part of the community and use local suppliers.”
Granholm says that the company initially promised to invest US$96 million, but that figure is now up to $260 million. Including the contractor base, she says Fincantieri is responsible for over 3,000 jobs (including contractors) in the region alone, an increase of over 80 per cent in employment and that unemployment in the upper peninsula of Michigan and Wisconsin has been reduced from over 13 per cent during the global financial crisis to around three per cent today.
“The fact that they over-performed on what they promised and the fact that they didn’t bring in a bunch of people, they were committed to our people and our suppliers, was really important,” she added. “They were committed to nurturing the supply base, so they could bring them along as well. So it’s not just the employees that are up-skilled, but the supply base as well. I was worried that it would be a temporary thing, but obviously that’s not been the case. It’s been a huge success, a huge gift. It’s one of the best things that I did as Governor.”
Littoral Combat Ship and the FFG(X)
Fincantieri Marinette Marine is teamed with Lockheed Martin on the Freedom class LCS program and has seven ships in production at the current time and two more in the material, or long-lead, procurement phase. The US Navy program of record is for a total of 52 ships, split between two designs – the Freedom class and the Independence class manufactured in the US by Austal, teamed with General Dynamics Mission Systems.
In US Navy service the two versions of LCS replace 77 older ships, including the FFG-7 Oliver Hazzard Perry class frigates (also the baseline design for the RAN’s FFGs), MHC-51 Osprey class coastal mine hunters and MCM-1 Avenger class mine countermeasures vessels.
According to Lockheed Martin the Freedom LCS supports more than 12,500 jobs across America (7,500 in Wisconsin and Michigan) and in excess of 800 suppliers in 42 states. The ships are built in the Marinette yard and launched into the Menominee River, before undergoing builder’s trials on Lake Michigan. After commissioning, the ships are sailed to the Atlantic Ocean via the St Lawrence Seaway, before heading to their home port in Mayport, Florida.
The company is also teamed with Lockheed Martin for the US Navy’s FFG(X) frigate program and is offering either a further version of the FREMM, or an evolved LCS design.
President and CEO Francesco Valente said that Fincantieri Marine Group will act as the prime for the FREMM proposal and Lockheed Martin will do likewise for the LCS variant. A Request for Proposal (RFP) for the FFG(X) program has been released to industry, with a decision expected in 2020. Under the program the US Navy is seeking to acquire at least 20 frigates.
Sea 5000 and Australian industry opportunities
In September the company announced several pilot orders, which will allow Australian companies access to Fincantieri’s global supply chain. Western Australia-based Hofmannn Engineering will manufacture the bow thruster for a Landing Platform Dock (LPD) vessel under construction for an un-named Middle Eastern Navy and has also signed a five-year Memorandum of Understanding to jointly co-operate in the development of Fincantieri’s US$250 million global market for the manufacture of marine systems and components.
Calibre has been awarded a pilot order for preliminary design of an advanced manufacturing facility in Adelaide, which will aid the integration of mechanical equipment into the Future Frigates and other ships built across Fincantieri’s 20 shipyards; and BlueScope Steel will supply steel for use in the construction of cruise ships overseas and the future test blocks of cruise ships constructed in Australia.
The company has also begun recruitment activities for Australian engineers, supervisors and technicians. It says that if it is successful more than 150 Australians will join the Italian FREMM Project from 2018 in Italy, before returning to Australia to lead the Sea 5000 project, supported by Italian subject matter experts.
Fincantieri Australia chairman Dario Deste says that the cruise ship hull blocks to be built in Australian shipyards will train the local shipbuilding workforce in Fincantieri’s tools and methods. The blocks are for a vessel being constructed for Coral Sea Expeditions and will be built in Australia from the second quarter of 2018 onwards.
In late November, the company announced that the three Australian shipyards invited to quote for the work are ASC Shipbuilding, Adelaide Ship Construction International, MG Engineering (all Adelaide-based) and Ottoway Engineering of Whyalla.
Deste says the purpose of the initiative is to start up Fincantieri’s shipbuilding operations in Adelaide and gain familiarity with local partners in the lead up to Sea 5000.
“There are three pillars to Sea 5000, the first is to build a cutting edge technology ship; the second is to build the ship in South Australia, with a local workforce and within schedule and budget; the third one is to develop an Australian Industry Capability,” he explained.
“We want to replicate what we did in the US in Australia, based on creating a local Australian company. On September 28 we announced that we would list on the Australian Stock Exchange if we are successful. That’s very important; it proves our willingness to actually be Australian.
“We are focussed on developing a capability in Australia; the supply chain is very important for us, because it will form the base for future shipbuilding. We want to show that we are committed to begin construction of the first ship in 2020, should we be successful in Australia.”
Disclaimer: ADM travelled to the US as a guest of Fincantieri Australia
This article first appeared in the December/January 2018 edition of ADM.