MARINETTE — Fincantieri Marinette Marine clarified and made its case for its request for a short-term loan of $50 million from Marinette County at a special meeting of the County Board of Supervisors on Tuesday morning.

Jan Allman, president, CEO and general manager of Fincantieri Marinette Marine, explained that the loan was needed to help finance improvements to the shipyard to enable it to construct multi-mission surface combatants (MMSC) for the Saudi Arabian Navy through a contract with the U.S.. Navy.

“It is critical to maintain employment in our shipyard, all signals indicate the Saudi program is going to happen,” she said. “The LCS (Littoral Combat Ship) program is approaching its end, only one ship was awarded for FY17 and most likely there could be at the most two more ships in FY18 and FY19.

“In the past our going rate was two ships per year, we need two ships per year to maintain our existing workforce (of 1,500 workers). The Saudi program with four ships to be built would fit in nicely to not only keep and maintain the employment needs of Marinette Marine, it is needed for us to sustain and grow.”

Allman said the Saudi program has the potential to create 400 additional shipyard jobs, which she said could equate to more than 3,000 jobs in the community through suppliers, restaurants and hotels.

“The Saudis have already put significant funds forward for this program, hundreds of millions of dollars,” she said. “We assume that it is likely to proceed. 

“Investments are required to move expeditiously with the Saudi program. We are seeking a bridge loan to assist, the construction of the Saudi ships requires a certain amount of capital upgrades to the shipyard. An investment plan must be included with our proposal to the government that must be submitted by late April.”

She said that once Marinette Marine receives the contract reward, “capital investments need to be deployed quickly so that construction can proceed expeditiously and stability of employment is preserved.”

“We have enjoyed a great partnership with the state of Wisconsin and other government entities and we are exploring our options to get further support,” Allman said. “We have a need to fund investments over the next 12 to 24 months in the amount of at least $50 million.”

She said aid from the state would not be available until later because of the timing of when the Legislature meets next.

“During talks with the county, the concept of a bridge loan was brought up and we welcome that idea because it offers us a lower interest rate than we could get from financial institutions. This is a loan which Marinette Marine will fully pay back to the county with interest. It has nothing to do with a grant or similar instrument. For the avoidance of doubt, Marinette Marine would only receive the loan if the Saudi program was awarded.”

The county board is scheduled to vote next Tuesday on an initial resolution to issue up to $50 million in promissory notes to provide a loan to Fincantieri Marinette Marine.

She said Marinette Marine is considered to be in the top tier among the eight shipyards in the United States that constitute the national industrial base for the Navy.

“The competition is very intense at this level.” Allman said. “We can win together with our community as a team.

“Our shipyard has transformed over the past decade and we are continuing to grow. We have created almost 1,000 jobs and lots of opportunities for the community. However, growth in shipbuilding does require establishing a partnership with both state and local governments as well as the local communities. All of our main competitors receive sizable support and assistance from both local governments and communities.”

She said the U.S. Navy and the government see “community support as a sign of a long-term commitment.”

“We want to use this as an opportunity to prove to our customers that the community is able and willing to grow with the industry,” Allman said. “Our parent company has already invested $200 million in the Wisconsin shipbuilding program.

“They are here to stay and they are ready and willing to continue to develop Marinette Marine. A supportive community is essential to maintain currently levels of employment and support another employment surge. 

She reiterated “there’s no guarantee that it (the Saudi contract) will come to Marinette Marine, Unless we get the contract we wouldn’t ask for the loan.”

Supervisor Ted Sauve asked if Marinette Marine had requested funding from other agencies?”

Allman said talks about possible grants are “still under development”

Sauve also asked her if Marinette Marine has previously been denied a request for funding from a major lending institution.

“No sir,” she said. “How this came about was through dialog with the county that they could give us a better interest rate than a financial institutions. That’s why it is so attractive to us, to help us do that bridge loan.”

Sauve also asked Allman if funding for the Saudi program could be “denied or cut off” in the future.

“As I stated the Saudis have already put a significant investment upfront on this program, I think $180 million already,” she said. “That’s just upfront so it’s highly unlikely that would ever happen.”

“I would like to both congratulate and thank Fincantieri Marinette Marine,” said County Board Chairperson Mark Anderson. “Congratulations go out to both the company and the Fincantieri Marinette Marine for developing the world class vessels that are being constructed at our shipyard here in Marinette County.

“And thank you for putting yourself in a position to receive additional contract awards to both maintain and grow the workforce here in Marinette County.”