A world premiere in cruising and diversification in US defense for Fincantieri

(To Leonardo Chiti)

The economic-industrial development of a given country can not be reduced to a single determining cause, on a process of such great complexity they act - combined among themselves in a variety of variations - a plurality of political, economic, ideological, geographical factors. The latter concern, for example, the geological composition (presence of raw materials, soil fertility, etc.), or the morphology of the territory.

In this multifaceted combination of factors, one aspect of primary importance is represented by the hydrography which was notoriously one of the elements on which the birth of industrial Italy was based, in particular its northern part rich in "white coal".

The abundant availability of water guaranteed by the presence of the great lakes and the Mississippi-Missouri basin (3.328.000 km2 extending along a course resulting from the combination of the two major rivers, over 5.600 km), played a key role in the development of the Midwest and thus in general for the rise to the US industrial power rank.

Obviously, being natural means of communication, navigable watercourses are very useful from a military point of view: during the secession war it was said that those who controlled the Mississippi controlled the South. In fact its waters allowed the Unionist troops to carry out deep penetration actions in the Confederate territory in a few days, which would have required weeks if they were conducted by land.

Although not the biggest, San Lorenzo remains one of the most important rivers in the whole of North America thanks to its connection with the great lakes system, connected by a network of navigable canals, among which stands out for the Welland Canal is important, connecting Lake Erie to Lake Ontario, allowing it to overcome a difference in altitude of 42 meters, bypassing the Niagara Falls high 50 meters.

Through the closed 16s of the Welland Canal every year, 3.000 commercial vessels transit, mainly large lakers, ships designed specifically for lake navigation with a cargo capacity that can reach the 30.000 tons.

The Laurentian system includes the lakes: Superiore, Michigan, Huron, Erie and Ontario, which connected together by navigable canals constitute a total continuous surface of more than 240.000 km2. As well as being an important waterway used for the transport of goods in one of the most industrial regions of the world, it is also a resource exploited by the enormous hydroelectric power plants that supply energy to the industries and cities of the region.

In terms of energy potential the strong point of the flow of water that feeds the Niagara falls, is not so much the height of the jump, which is less than a third compared to the Umbrian Cascate delle Marmore (165 meters), how much from a very high water flow.

During the Second World War the waters of the San Lorenzo basin were also the training camp of the US Navy units launched in the construction sites of the two coasts and the South, including the Bethlehem-Fairfield plant in Baltimore (Maryland), and Permanent Metals Yards, owned by Henry J. Kaiser, in San Francisco. In the large lakes area, however, it was not limited to testing activities and testing the new ships, in fact there were also local production sites here.

In the town of Marinette, Wisconsin, there are the Marinette Marine Corp. plants owned by Fincantieri Marine Group, the US division of the Fincantieri group. The activity of the Marinette shipyards is focused on the production of military ships, while the other FMG production sites in Wisconsin are: Sturgeon Bay, where the Bay Shipbuilding Co. plants are located, specialized in commercial ships and repairs, and Green Bay, home of ACE Marine LLC, focused on aluminum constructions.

These important US shipbuilding centers became part of the Fincantieri family in January of the 2009 with the completion of the acquisition of Manitowoc Marine Group, which brought 1.400 employees and a turnover of 320 million dollars.

Since MMG is specialized in military shipbuilding, this operation allowed to enter the American defense market, accelerating a path of internationalization and diversification, within the framework of an industrial strategy aimed at conquering new markets both in geographical terms and in terms of type of products, which became even more uninhabitable with the fall of the global financial crisis in the autumn of 2008, with heavy repercussions on civil shipbuilding for trade and tourism.

The first half of the 2008 had been a record in terms of orders, but in the second half of the year not only had the orders become invalid, but the clients also asked to delay the delivery times of the previous ones. Internationally throughout the 2008 the navalmeccanico sector recorded a decrease of 39% orinativi, with for example the container units that in June totaled investments for almost 7 billion dollars, practically zeroed in November of the same year.

It is well understood how vital an industrial policy of geographic and productive diversification is, especially in the direction of an area such as the defense that in many cases can boast an anticyclical trend. Furthermore, the acquisition of Manitowoc Marine Group - which became Fincantieri Marinette Marine - opened the way to an important industrial partnership given the presence of Lockheed-Martin in the capital of the company in Wisconsin, with a share valued around 13%.

The group headed by Marillyn Hewson (Chief Excutive Officer since January 2013), is in fact at the helm of the industrial team, of which Fincantieri is an important part, to whom the US Navy assigned the construction of the class units Freedom as part of the Littoral Combat Ship program, as the press releases of the consortium recite: it is one of the main US naval construction programs and provides for the supply of a new generation of medium-sized multi-role vessels, particularly innovative and suitable for use both for coastal surveillance and defense activities and for deep-water operations in different types of missions in the field of defense against "asymmetric" threats such as mines, silent diesel submarines and fast surface vessels.

This important contract involves a subcontracting chain that involves 40 USA states consisting of around 9.000 small and medium-sized enterprises. Among these, the main (a sort of "prime suppliers"), are 490, and show a greater territorial concentration since over 200 have their headquarters in the Midwest, while the primacy for single state is up to California with 154 followed by Florida and Texas, with 72 and 35 respectively.

In April, the Trieste-based company announced that the eleventh unit of the class had been contracted Freedom, LCS-25, whose delivery is scheduled for the 2020. The management of Lockheed-Martin underlines how the sites engaged in the LCS program are working at full speed, making the most of their production capacity, thus achieving economies of scale that have allowed to halve the cost per sample (settling on 360 million dollars), with respect to the assembly of the pilot unit (lead ship).

In fact if we take the figure assigned at the end of last November from the US Navy to the consortium led by the Bethesda group, for the completion of the tenth unit of the program, LCS-23 "Cooperstown", this was equal to 279 mln dollars and went to add to the 79 mln of advanced financing (advanced procurement funding), in the previous month of April.

In the same view of production efficiency, particular importance is attributed to the cost of the entire life cycle (Life-Cycle Cost), of the units launched and scheduled, which, according to data provided by Lockheed-Martin, is significantly contained in the comparison with the other types of vessels: 82% compared to a frigate (FFG), 47% compared to a destroyer (DDG), and 36% compared to a cruiser (CG).

It seems that the attention to costs of the entire cycle of use of an industrial product was born in the Midwest, since the first real after-sales service can be traced back to the customer assistance networks set up by the US manufacturers of agricultural machinery from the second half of the nineteenth century.

Thanks to the machines patented by Jerome Increase Case and Benjamin Holt the threshing was mechanized very early and already in the 1907 a combine was able to perform in a small fraction of time the work of many men since the cut, the threshing and the bagging of wheat were brought together in a single session of processing steps.

Steam plowing was more practiced in America, with its vast flat fields, than in Europe, but a steam tractor was heavy and unwieldy, as well as requiring excessive time for engine set-up. It was the petrol tractors, such as the "Farmall", that since the 20 years of the last century have made it possible to overcome these disadvantages, generating a further leap in productivity for agriculture.

Generally, a farmer was not able to repair agricultural machinery that became increasingly complex and the intermediaries who ran the sales circuit did not know how to work properly, so manufacturers were directly responsible for organizing their own sales and service network. after-sales which, among other things, led to a considerable expansion of the turnover.

Today, market surveys in this sector show that logistics assistance to the product weighs five times more than any other factor in the purchase and repurchase process. This not only concerns the containment of the costs of the useful life of the machinery but also - particularly in certain periods of the year linked to the plowing-sowing-harvest cycle - the maintenance of an operating function that is as constant as possible.

It is no coincidence that in the field of military supplies there is no contract, especially naturally when it comes to the "flagship" programs related to large weapon systems, which do not include post-sales assistance, and possible sessions of logistic operational adjustment, for a period that can be measured in decades as in the case of the Shortfin-Barracuda 12 submarines ordered from Australia to the French DCNS.

The statistical approach underlying the subdivision between industry and services constantly underestimates the importance of manufacturing companies, the so-called "service economy" owes its existence to the industrial production of complex machinery.

Precisely from tourism, one of the emblematic branches of the services category, comes a recent and proud declaration that confirms how the tertiary and manufacturing sectors are the proverbial two sides of the same coin, represented by the affirmation of the industrial society.

In a world where the economy is often virtual, we with our orders contribute to the real economy and create places for metallurgical workers (Pierfrancesco Vago, executive director of MSC Cruises, "Le Figaro", 07 / 04 / 2016).

In the same way as cars, appliances, information and communication technology products, adequate maintenance and repair activities and the availability of spare parts are essential for the defense industry. From this it clearly descends how the continuous exercise of the Year in the Year exercise within the Defense Function of the budget of the relative ministry, means to put more and more at risk the effective operational capacity of the armed forces.

On average, the crew of an aircraft carrier is composed for 25% by specialized technicians and mechanics and the hangars of these large units have many features that make them look like real industrial warehouses, where they replace or repair damaged or damaged parts of the aircraft and in case of necessity it is possible to proceed in complete autonomy to the assembly of entire components, as in the case of the engine.

In the summer of 2015, Fincantieri Marine Group LLC and Gibbs & Cox Inc. (one of the leading naval design and engineering companies in North America), announced a joint research and development initiative in the commercial ship sector. and military, with the declared intention of optimizing the combination of economic convenience and production efficiency.

In particular, the CEO of Fincantieri, Giuseppe Bono, and the CEO of Gibbs & Cox Rick Biben (photo), wanted to underline the potential in terms of developing a unified vision ("end-to-end"), of the collaboration between the designers of Gibbs & Cox and the engineers and experts of Fincantieri, in order to be able to meet the needs of the programs throughout the entire life cycle of the ships.

Fincantieri is the only European manufacturer of military vessels to include among its activities also an important presence in the civil navalmeccanica. Between the 2004 and the 2005 the group entered the megayacht sector, signing an agreement with the company Viareggio Azimut-Benetti, one of the leading brands of luxury yachting.

At the same time the manufacturer from Trieste has developed the refitting: repairs and transformations, one of the sectors that guarantees the highest margins. Among these activities stands out, for economic importance and spectacularity, the so-called "jumboizzazione", which consists of a sort of upgrade of cruise ships whose transformation increases its size and lengthens its useful life.

In practice it is a matter of cutting the ship in such a way as to separate the center-stern section from the forward section which is made to slide forward a few tens of meters, so as to position and fix the lengthening section. Following the cutting operation it is necessary to proceed to disconnect and reconnect a quantity of cables and pipes whose number is measured in the order of magnitude of the thousands (on average 2-3 thousand), and moreover we must proceed for a good part manually.

Thus, putting in the field of expertise, skill and a not indifferent dose of patience, Fincantieri's technical and specialist teams add bridges, cabins, dance halls, cinemas, restaurants, fitness rooms, theme parks and so on, as in case of MSC Armonia, "jumboizzata" in the summer of 2014 in the construction sites of Palermo.

In 2013 Fincantieri took over 55,6% of the Norwegian company STX OSV, renamed VARD, a world-class company specialized in the construction of platforms for the extraction and processing of gas and oil. With this acquisition, the Italian manufacturer had practically doubled its turnover, from 2,3 to 3,8 MLD in euros.

The sharp drops affecting the energy and raw materials sector, and in particular oil, have created a difficult situation for VARD, especially for its Brazilian associates (VARD Niteroi SA and VARD Promar SA), on which they also weigh the repercussions of the political crisis that is affecting the South American country, of which the cases of corruption that emerged around Petrobras budgets, have been the main triggering factor.

The Italian production sites specialized in military vessels are: Riva Trigoso (Genoa), and Muggiano (La Spezia), where the sections of the New Major Unit, Cavour aircraft carrier, were delivered and assembled at the 27 March 2008 platform level. For these sites an integration project had been set up on whose actual implementation concerns are raised by the workers' representatives (see the heading "Letters" on this same headline).

Fincantieri remains above all the world leader in the construction of large cruise ships assembled in the factories of Monfalcone (Gorizia), Marghera (Venice), and Sestri Ponente (Genoa). Of the 55 large passenger ships that are currently under construction (54 in Europe and 1 in Japan), well 22 belong to the group of Trieste that can boast a total equal to the sum of Germany (12) and France (10), which occupy the second and third position in this ranking.

This is a sector that does not seem to know the crisis with a number of passengers that 2016 estimates will reach 24 mln, with a significant increase compared to 17,8 mln 2009. On the other hand, if you can not talk about an offer for all budgets, it can be said that it is now for many, given that the large capacity of these ships allows to achieve important economies of scale, differentiate at best the services included in the holiday packages and therefore also the prices presented to customers.

To give an idea of ​​the level reached by these giants you can borrow an example from the cousins ​​of the Alps, with which among other things there are collaborations through the joint venture Orizzonte Sistemi Navali (51% Fincantieri and 49% Leonardo -Finmeccanica), which realizes the FREMM frigates and as part of the Orizzonte program built the units Andrea Doria and Caio Duilio, launched as a destroyer in place of the Audace class and alongside the DDG Durand de la Penne, subject to reclassification as frigates.

Last May 15 the Harmony of the Seas, the largest cruise ship ever built, left the shipyard of Saint-Nazaire on the Atlantic (Pays de la Loire)), at a time of Southampton, destination of the maiden voyage. The Harmony was built by STX France for the American Royal Caribbean Cruises, it is 362 long and 66 wide, has 16 decks and can embark almost 8.500 people, 2.100 crewmen and 6.360 passengers.

The sensationalist comparisons are wasted on the press and in the French news: just think that this ship is as long as 5 A-380, plus 90 mt more than the Titanic that could carry 385 crew and 2.471 passengers. Here we can limit ourselves to add that of the more common Italian 8.000, about 70% has less than 5.000 inhabitants.

Observing the numbers of those that are rightly called "small floating cities", one can not help but reflect on an aspect linked to the fact that the Navy is the "dual use" weapon by definition, so much so that the famous naval historian and theoretician of maritime power, Alfred Thayer Mahan (1840-1914), believed that the navy was a better tool than the army to support national politics, as it can boast a less aggressive profile and proved more flexible in the ways of employment and therefore more sensitive to political directives.

When we talk about the dual use of a given industrial product, we must bear in mind that this concept can not be interpreted in a single way, automatically meaning a project born for military purposes that can also be used in the civil field, because the inverse relationship is also valid. the examples in history are not lacking.

At the beginning of September the 1914 General Joseph Simon Gallieni (1849-1916), military governor of Paris, ordered to seize all the means of transportation available in the city, among which were 1.200 taxis that allowed to bring to the front about 8.000 infantrymen decisively contributed to blocking the penetration of the German offensive in the Battle of the Marne.

Although after the collapse of the USSR it has become fashionable to believe that a conflict between great powers has become impossible (an illusion as dangerous as cyclically recurrent, as taught by Stefan Zweig's paper, "The World of Yesterday"), can exclude that in the future large cruise ships do not know a military use, transporting equipment not intended for leisure and a whole other type of passengers compared to holidaymakers keen on excursions on the waves of seas and oceans.

(photo: Fincantieri / MSC / US DoD / Gibbs & Cox / Navy)