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"MM" is the standard rate designation for a Navy Machinist's Mate; however, there are many levels of MM specialties (e.g., nuclear, motorboat, auxiliary, aviation, etc., which is where the extra letter designator comes from. The increase in MM specialties is due to the Navy's policy of combining some older ratings (e.g., Torpedoman) into the MM rating to save money.
The "L" designation indicates the sailor is a General Level (no specialty) Machinist's Mate; the "2" indicates rank, in this case a Petty Officer 2nd Class (E-5).
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