Wis. company could get $1 billion deal with United Kingdom for military trucks
By RICK BARRETT | Milwaukee Journal Sentinel | Published: July 12, 2017
OSHKOSH, Wis. (Tribune News Service) — Oshkosh Corp., one of the state’s largest manufacturers, could pursue a $1 billion military vehicle deal with the United Kingdom under approval that’s been granted by the U.S. State Department.
It doesn’t mean the sale has been concluded, but the agency’s approval is a necessary and important first step toward landing work that could help sustain several thousand jobs in Oshkosh for years to come.
In a news release, the State Department said the United Kingdom has requested a possible purchase of up to 2,747 Oshkosh Joint Light Tactical Vehicles valued at $1.035 billion.
“This proposed sale supports the foreign policy and national security policies of the United States by helping to improve the security of a NATO ally which has been, and continues to be, an important partner on critical foreign policy and defense issues,” the State Department said.
The JLTV is manufactured in Oshkosh. The company’s defense division employs about 3,700 people, with most of them in the Fox Valley.
Oshkosh Corp. has shown strong interest in sales of military vehicles to U.S. allies.
The company is pleased to see the proposed sale of vehicles to the United Kingdom progress to the next phase, spokeswoman Alexandra Hittle said in an email Tuesday night.
“That said, we must defer to the U.S. government and the U.K. … on details,” she wrote.
The JLTV is a bigger, more powerful sequel to the military Humvee, which has been a troop carrier for decades but wasn’t designed for protection against improvised explosive devices that have killed many troops in Iraq and Afghanistan.
The U.S. Army and Marine Corps plan to buy thousands of the vehicles at a cost of about $250,000 each, supporting many years of work in Oshkosh.
The sale to the United Kingdom would include vehicle armor, parts and accessories, technical support and logistics support services.
“The United Kingdom will have no trouble absorbing this equipment into its armed forces,” the State Department said.
The agency’s approval is necessary for sales of U.S. military equipment to a foreign government.
“Foreign military sales are a complicated process. But they tend to go more smoothly with close allies like Britain than they do with countries in places like the Middle East,” said Loren Thompson, chief operating officer of the Lexington Institute, an Arlington, Va., policy research firm that follows the defense industry.
The JLTV work in Oshkosh could last for decades, according to Thompson.
“Even after they build the vehicles for the U.S. Army and the Marine Corps, and for U.S. allies, they will have 20 or 30 years of spare parts and service to provide to the military. So it’s a huge franchise,” Thompson said.
Less than two years ago, Oshkosh Corp. topped defense contractors Lockheed Martin Corp. and AM General LLC in the bidding and vehicle evaluation process for the JLTV business from the Army and Marine Corps.
The Army said it planned to buy up to 50,000 of the vehicles in a deal that, if fully realized, would be worth about $30 billion.
It was a highly competitive bidding process followed by protests from Lockheed Martin.
But the JLTV positions Oshkosh Corp. as one of the world’s leading producers of military vehicles, Thompson said.
“Oshkosh has always been big in trucks, but now it’s got a much broader market, and it will probably thrive for decades to come just on the JLTV business,” he said.
“It shows that Oshkosh was right to go full bore on military business, and it shows they were right to bid aggressively for JLTV because this franchise will last for generations.”
The program for the U.S. military has resulted in more than 1,400 new jobs at the company since about August 2015, in addition to hundreds of jobs at other Wisconsin companies.
“There is an extensive supply chain that goes along with this,” said Jim Golembeski, executive director of the Bay Area Workforce Development Board in Green Bay.
“This is wonderful news and it’s well deserved.”
“Eleven years ago, we sat down with a handful of manufacturers in northeast Wisconsin and said we’ve got to put this area on the world map as a manufacturing leader. And by golly we have come a long way,” he said.
The Army plans to begin fielding the first of the vehicles in 2019, according to the publication Inside the Army.
Speaking at a June 14 media day at Marine Corps Base Quantico in Virginia, Col. Shane Fullmer said the first JLTVs will go to an infantry brigade combat team in the 10th Mountain Division based at Fort Drum, N.Y.
The program is in low-rate initial production, with full-rate production expected to begin in the military’s 2019 fiscal year.
“We expect any future foreign-military sales of the JLTV to follow the U.S. full-rate production decision planned for FY 2019,” Hittle said.
The Army is considering increasing its approved acquisition objective of 49,099 vehicles, but no decision has been made, according to Inside the Army.