Proposed cuts pack big impact for Wisconsin city

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Associated Press

Posted on March 2, 2014 at 11:34 AM

Updated Monday, Mar 3 at 9:30 AM

WASHINGTON (AP) — To see the impact of strategic military decisions on local communities, look no further than Marinette, Wis.

Defense Secretary Chuck Hagel's vision for leaner, more versatile military targeted the littoral combat ship, the marquee product of the city's biggest employer. And that could mean lost jobs in Marinette, a city of roughly 11,000.

"It's been hanging out there," Marinette Mayor Denise Ruleau said. "I think the community is aware that we have two 10-ship contracts. That it will supply them with five years' worth of work."

But Hagel's proposal to cancel 20 of a planned 52 ship orders raises questions about the five years after that. Marinette has a relatively diverse economic base, but its biggest employer is Marinette Marine, which builds the littoral combat ships with defense contractor Lockheed Martin.

About 2,000 jobs in Marinette are directly linked with the littoral combat ship program. The current projected overall cost to the Navy for the littoral combat ship program is roughly $34 billion.

Ann Hartnell, the executive director of the Marinette County Association for Business and Industry, said dozens of other businesses across Wisconsin and the region, like parts suppliers, also would be affected by the cuts.

"I'm not going to worry until the cuts are final and I think that's kind of the attitude of everyone I know," Hartnell said. "We know it may be coming."

Marinette Marine has other projects besides the combat ships. But state officials big and small have strongly resisted efforts to cut the program. This week, both of Wisconsin's senators, Democrat Tammy Baldwin and Republican Ron Johnson, said they would fight to preserve the program, as did the region's congressman, Rep. Reid Ribble, R-Wi

Ribble said the debate over the program wasn't over.

"The future of the (littoral combat ship), or its next iteration, is far from settled and there are numerous debates and discussions that will be occurring in the days and weeks ahead," Ribble said.

The ships also are built in Mobile, Ala.

Speaking Monday, Hagel questioned the ships' capabilities against more modern weaponry. He said the ships were designed to "perform certain missions ... in a relatively permissive environment." And he said the Navy needed to determine whether the ships had enough protection in an era with more advanced military technologies.

The ships have critics in Congress, too.

At a Senate confirmation hearing for a deputy defense secretary earlier this week, Arizona Sen. John McCain cited a 2013 General Accountability office report on the program's cost overruns.

In Marinette, residents dispute the negative assessments. "These sound like versatile ships," said Hartnell. "The Navy needs to be modernized."

The shipbuilding contracts have helped bring about improved infrastructure and commercial development and created interest from other businesses, hotels and developers, Ruleau said.

"We have a lot of things in the works, other retail developments, people who are looking because of the new developments with Marinette Marine," she said.

To be sure, Marinette is not relying only on its shipbuilding industry. The town and surrounding area have other manufacturing sites that make parts for planes and helicopters, and a paper production facility. A University of Wisconsin campus in located within city limits.

Ruleau says flatly that she doesn't worry about her town even if the proposed cuts to ship orders go through.

"I don't think there's an immediate sense of emergency or concern," she said.

Hagel said the proposed cuts will be included in President Barack Obama's budget for fiscal year 2015, which will be submitted next week. Congress would then have to approve the budget.

Even as the fate of program is debated in Washington, production of the existing contracts continues. And the town continues to celebrate it.

Last week, Marinette hosted a keel-laying ceremony for one of the ships under construction, the USS Sioux City. The ship is scheduled to be on the water by this 2016.

"It was a very, very nice event," Ruleau said. "It was well attended. So hopefully that is overriding this a little bit."

She added, "My hope is always that people are always going to focus on the positive."

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