Army Awards Tactical Vehicle Contract to Wisconsin Firm

26 Aug 2015 | Author: | No comments yet »

Arkansas package fails to secure military vehicle project.

OSHKOSH, Wis. The Army plans to purchase about 55,000 of the multipurpose land vehicles for its troops and the Marine Corps through 2040 as a better-armored replacement for the Humvee.LITTLE ROCK, Ark. (AP) — Arkansas officials expressed disappointment Tuesday that a military vehicle assembly contract they had hoped to lure with an $87 million incentive package is going to another state. — Wisconsin-based Oshkosh Corp. won a major contract Tuesday to build a new combat vehicle to replace a large share of the U.S. military’s Humvee troop carriers. LMT 0.77 % and AM General LLC to build as many as 55,000 Joint Light Tactical Vehicles, or JLTVs, over the next 25 years to replace part of the Humvee fleet and some larger military trucks.

The JLTV is one of the Army’s highest priorities and follows a series of budget cuts and shifting requirements that prompted the Pentagon to cancel helicopter, artillery and communications programs, after investing billions of dollars. The losing bidders have 10 days to lodge a protest with the Government Accountability Office after they’re briefed on the decision, and Lockheed suggested that it may do so. “We believe we presented a very strong solution and await the customers’ debrief to hear more detail regarding the reasons behind this selection before making a decision about a potential protest,” the company said in a statement. Oshkosh has a long history of producing military vehicles and offered a brand new design to meet the Army’s requirements for a four-wheeled truck to carry two or four personnel that is resistant to mines and roadside bombs, but also is light enough to be carried by air. “It’s a historic win for us,” Oshkosh Chief Executive Charles Szews said in an interview, adding that the defense business “supports the whole infrastructure for the company.” The deal gives Oshkosh a stable, long-running contract for assembly work to offset other, volatile business lines, including specialty vehicles such as firetrucks and cement mixers.

The Humvee entered service in 1985, when “improvised explosive devices (IEDs) and other anti-vehicle explosive devices were not a major factor in military planning,” according to a March 9 report by the Congressional Research Service. Army and Marine Corps by replacing a large portion of the legacy HMMWV fleet with a light tactical vehicle with far superior protection and off-road mobility. During the contract, which includes both Low Rate Initial Production (LRIP) and Full Rate Production (FRP), Oshkosh expects to deliver approximately 17,000 vehicles and sustainment services. “Following a rigorous, disciplined JLTV competition, the U.S. The company laid off hundreds of assembly workers to lower expenses even as the company moved ahead with development work on its JLTV proposal. “It’s the difference between having a viable defense business for the next five or 10 years and having a big question mark,” said Jefferies analyst Stephen Volkmann.

Unlike the thin-skinned Humvees, the JLTV would have the protective armor of a tank but the fleet-footed mobility of a Jeep, able to ford rivers and cross rugged terrain, while also being able to carry significant amounts of cargo. The vehicle is designed to provide more protection against roadside bombs and mines than Humvees without being as big as another military vehicle produced by Oshkosh, the Mine Resistant Ambush Protected vehicle, or MRAP. The JLTV production contract awarded to Oshkosh includes a base contract award and eight option years covering three years of LRIP and five years of FRP. It would have been the second time the state issued bonds under a 2004 voter-approved constitutional amendment aimed at helping land major economic deals. Army officials said all three bids came in below the cap, with the average price of vehicles equipped with communications and other equipment expected to come in under $399,000, taking the total program cost to $30 billion.

The vehicles are “delivering major improvements in protected mobility for soldiers and have succeeded in executing a program that remains on-budget and on-schedule,” said Heidi Shyu, assistant secretary of the Army for acquisition, logistics and technology The initial contract awarded Tuesday is for $6.7 billion for 17,000 vehicles. Oshkosh will begin delivering vehicles approximately ten months after contract award. “Because of the JLTV program, our Soldiers and Marines are getting a level of technical performance that no other vehicle can match,” said U.S.

It’s not clear whether Wisconsin or Indiana offered any incentives, but union workers at Oshkosh in 2013 agreed to a contract extension so that the company could nail down its labor costs for the project. The potential loss is more of a blow for AM General, which has subsisted on a diet of Humvee exports and a recent deal to assemble vehicles for Mercedes-Benz at its plant in Mishawaka, Ind. Although the Humvee will be around for years, it is slated to be phased out, capping a career that spanned the 1989 invasion of Panama, the Persian Gulf War, the Bosnian War and the wars in Iraq and Afghanistan.

The Oshkosh JLTV combines the latest in automotive technologies with the Oshkosh CORE1080 crew protection and TAK-4i™ independent suspension systems to provide next generation performance. Production would begin in two to three years and would ramp up from a few hundred vehicles per year to 3,000 vehicles per year under the contract, he said.

In designing its JLTV, Oshkosh leveraged its extensive experience producing and sustaining more than 150,000 heavy, medium and protected MRAP vehicles for the U.S. and its allies. “Developing our Oshkosh JLTV solution has been an incredible journey,” said Szews. “For the past decade, our entire team has been focused on putting our troops behind the wheel of the world’s most capable light vehicle. I offer my sincere thanks to our employees and suppliers for their years of dedication to reach this historic day.” Oshkosh Defense is a leading provider of tactical wheeled vehicles and life cycle sustainment services.

The contact will mean business for companies that supply Oshkosh Corp. and the economic benefits will ripple across the Oshkosh area for years, said Rob Kleman of the Oshkosh Area Chamber of Commerce. “This is outstanding news,” Kleman told Oshkosh Northwestern Media. “We are very ecstatic to hear that. For decades Oshkosh has been mobilizing military and security forces around the globe by offering a full portfolio of heavy, medium, light and highly protected military vehicles to support our customers’ missions. This bodes well from an economic standpoint for the whole region.” Oshkosh Defense, Wisconsin’s largest defense contractor, is part of a larger company that also makes fire and emergency vehicles and other commercial equipment such as scissor lifts, cement mixers and garbage trucks.

Every Oshkosh vehicle is backed by a team of defense industry experts and complete range of sustainment and training services to optimize fleet readiness and performance. Oshkosh Corporation manufactures, distributes and services products under the brands of Oshkosh®, JLG®, Pierce®,McNeilus®, Jerr-Dan®, Frontline™, CON-E-CO®, London® and IMT®. Oshkosh products are valued worldwide by rental companies, concrete placement and refuse businesses, fire & emergency departments, municipal and airport services and defense forces, where high quality, superior performance, rugged reliability and long-term value are paramount. All statements other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements.

When used in this presentation, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

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