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The loss, coupled with delays in the awarding of a Navy contract, will result in layoffs at the company's shipyard in Marinette, Richard McCreary, Marinette Marine Corp. CEO said Friday.
Manitowoc Co. has shipyards in Marinette and Sturgeon Bay. It also has a Great Lakes ship repair business in Cleveland.
The company's marine group employs about 1,600 people.
Manitowoc lost the bid to build up to 34 cutters to Bollinger Shipyards Inc. of Lockport, La. Bollinger has been awarded an $88 million contract for the design and construction of the first of the cutters, which are supposed to be fast-response vessels 153 feet long and capable of speeds exceeding 28 knots.
The first boat will be delivered to Coast Guard District Seven, based in Miami, in the fall of 2010. It will have to complete a comprehensive operational test and evaluation period before entering service in the Caribbean.
Manitowoc and Marinette Marine are reviewing the contract decision to decide whether to appeal.
"We were surprised and certainly disappointed," McCreary said.
There's only a slim chance of overturning the deal, which would give Bollinger about seven years worth of work.
"Only about 2% or 3% are ever overturned," McCreary said.
In September, Marinette laid off about 90 workers while it waited for the Coast Guard's decision. The next round of layoffs will come in early November and could include about 60 workers, the company said.
"We have emphasized that these layoffs will be temporary in nature, and we believe that we will be able to bring these folks back to work relatively soon as one of two things happen," McCreary said.
First, the company is close to getting some commercial shipbuilding work. Second, it's waiting on a decision from the Navy on what shipyard will build another littoral combat ship that's meant for quick-strike operations along shallow coastlines, where enemy forces are able to hide from bigger Navy vessels.
The U.S. House of Representatives has approved a Defense Department bill that includes funding for two additional littoral combat ships. Under the bill, the Navy has been instructed to award the contracts as soon as possible.
Marinette has finished a littoral combat ship that's scheduled to be commissioned by the Navy next month in Milwaukee.
The loss of the Coast Guard bid comes as Manitowoc Co. is selling its marine division, including Marinette Marine, to Italian shipbuilder Fincantieri.
It's unknown whether the loss of the Coast Guard bid will affect the $120 million cash sale that's expected to close yet this year.
It depends on the terms of the sale, said George Reis of George V. Reis Investments in Two Rivers.
Manitowoc's once-troubled marine business has gone through significant changes in recent years, and its operating earnings have improved.
Fincantieri hasn't announced its plans for the marine group's facilities, yet it's unlikely to back out of the deal because of one lost contract.
"One of the pluses is the Italians are looking for a shipyard in the United States," Reis said.
Manitowoc's larger businesses involve making construction cranes and food-service equipment.
On Friday, Manitowoc shares closed at $13.22, down 80 cents. It's the stock's lowest close, adjusting for splits, since January 2006. The stock has traded in a range of $13.93 to $51.49 over a 52-week period.
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