Fincantieri reshapes contract with US Navy

In the background is the need for the US Navy to review its development plans by focusing on smaller ships and new technologies. With the result of forcing a change of pace on some dossiers that are being reshuffled or, in others, leading to the complete cancellation of programmes as in the case of the shipowner Eastern. Hence the Americans' decision to redefine the contract with Fincantieri that has at its centre the construction of the Constellation class frigates under construction at the Fincantieri Marinette Marine (Fmm) site in Wisconsin.

A remodelling that passes through a dual track: on the one hand, the continuity of work on the two frigates currently under construction with the termination of the contract for the other four already on order, against which the group led by Pierroberto Folgiero will be compensated; on the other, the identification of new classes of naval units relating to new orders with which Fincantieri aims to respond in the best possible way to the new military naval doctrine of the US administration and the rebirth of the US shipbuilding industry. Translated: the new priorities are no longer large frigates, but the spotlight will be on technological ships, amphibious warfare, special missions and even icebreaker units.

A change of pace that Fincantieri's number one, Pierroberto Folgiero, declines in the following way: 'It is good news,' comments the top manager, 'because it means that the study phase that the new American administration was carrying out has been completed, defining the development strategy for the American fleet and identifying what the long-term contribution envisaged for Fincantieri USA will be. The latter, Folgiero recalls, 'has an 18-year history in the US and invested 800 million when no one was ready to bet on American shipbuilding, in the midst of disengagement and deindustrialisation. With this agreement, Fincantieri finds a precise location within the military industrial base in the long-term vision of the US Navy'.

In concrete terms, the Constellation class programme will be 'broken' in two: one part, Folgiero points out, 'will be transformed into new vessels more in line with the type of strategic ships that the American system has focused on, including smaller ships with a more contained displacement and prospectively with more technology on board'. In this way, continued the CEO of Fincantieri, 'we will continue to be involved by enhancing the value of our workforce, our suppliers, and our assets themselves'. The remaining part concerns, on the other hand, two ships that go in continuity with the remodelling, which, Folgiero further clarifies, 'takes into consideration the economic commitments already made and which will be compensated for by reason of a decision taken by the Navy 'for convenience''. Fincantieri has not provided figures to that effect, but the backlog for the six ships is worth €5 billion: of this, €3 billion should cover the retained ships and the indemnity, while the remaining €2 billion will go to support the transformation of the programme relating to the four frigates that will be discontinued. 'These four will be transformed into new orders,' Folgiero explains, 'as a consequence of the change of strategy that the Navy has intended to undertake.

In short, a zero balance change for Fincantieri that must be included in a broader strategy put in place by the new administration led by Donald Trump, which aims to re-launch the American shipbuilding system, with the objective of overcoming the industrial shortcomings inherited from the past and defining a strategy to compete with the Chinese antagonist by increasing the technological content despite the deficit in terms of the number of ships at sea. As a result, the US government has put its hand to all programmes, defining, as mentioned, several remodifications with the aim of preserving US production capacity and, above all, the operations of the few operators present in the country, among which Fincantieri USA plays a leading role.