Leaders laud Oshkosh Corp. Army contract

Oshkosh Corporation executives with state and local leaders praised a $6.7 billion Army contract award to build the Humvee’s replacement as a benchmark for rippling prosperity throughout Wisconsin, at a press conference Wednesday.

The Army award means Oshkosh Corp. will produce about 17,000 Joint Light Tactical Vehicles for the Army and Marines, with options for further contracts to build 50,000-plus vehicles total, valued at more than $30 billion.

JLTVs are expected to replace about a third of military Humvees. Each JLTV costs $250,000.

“After a rigorous and methodical selection process, the Army selected Oshkosh Corp. to build what will be the vehicle warfighters use to perform missions outside the wire and bring them home safely,” Oshkosh Corp CEO Charlie Szews said standing before a crowd during the conference backed by three JLTVs.

Though the Oshkosh Corp. contract announced Tuesday will end Aug. 24, 2024, the company would pursue further JLTV contracts that could support vehicle production through 2040.

Oshkosh Corp. stock bolted 12 percent to $43 in after-hours trading following the announcement Tuesday, offsetting more than half of the company’s 20 percent fall this year. Oshkosh Corp. will begin production in 10 months, according to a company media release.

The JLTV is billed as a lighter, more durable incarnation of the iconic Humvee. Oshkosh Corp. uses General Motors engines and gearboxes by Allison Transmission Holdings. Troy, Michigan-based Meritor Inc. announced Wednesday it plans to supply JLTV wheel-ends.

Oshkosh Corp. beat out Maryland-based Lockheed Martin and Indiana-based AM General for the contract to build the JLTV. Arkansas offered Lockheed $87 million in incentives to build the JLTV contract there, though that had no bearing on the military’s decision.

Lockheed Martin and AM General have 10 days to file an appeal to the military’s decision to award Oshkosh Corp. the contract. Lockheed – the single-largest U.S. military contractor – said it will wait for an Army debriefing before deciding to protest the award.

Szews told Oshkosh Northwestern Media in a phone interview after the contract announcement Tuesday night that the contract decision will allow the company to strengthen sectors of its business harmed by a strong U.S. dollar and an authorization lapse in the U.S. Export Import-Bank.

“As we look to the future our defense segment will serve as a catalyst for company growth in both the U.S. and international markets,” Szews said before the crowd assembled in Oshkosh Corp.’s parking lot Wednesday.

And the Army’s contract award means business for the “hundreds” of Wisconsin companies that supply Oshkosh Corp. – an economic boon regionally, Szews said. More than 300 companies supply Oshkosh Corp. across 31 states.

Praise of politicians

U.S. Rep. Glenn Grothman, R-Glenbeulah, said Oshkosh Corp. builds a product that matters to U.S. military members. And with this contract comes more jobs; three or four are created at suppliers across Wisconsin for every worker hired at Oshkosh Corp., he said.

“They’re not little plastic widgets,” he said during an interview with Oshkosh Northwestern Media. “Its high-tech stuff going all over the world—and it’s safe. It’s not only saving lives of our servicemen but also the lives of our allies around the world, as well.”

State and local lawmakers echoed praise of the contract announcement.

• Grothman said to the crowd during the press conference: “I don’t think people understand the degree to which the Oshkosh area… is really the manufacturing heartbeat of this country.”

• “This is great news for the Oshkosh Corporation and the entire Fox Valley area,” State Sen. Rick Gudex, R-Fond du Lac, said in a statement Tuesday.

• Sen. Ron Johnson, R-Oshkosh, told the audience Wednesday “to say thank you on behalf of the community of Oshkosh … the state of Wisconsin … a grateful nation.”

• An aide to Sen. Tammy Baldwin, D-Madison, spoke in her absence. Baldwin in statement said she was “proud” of the company for “putting together” the winning bid.

Community seeks diverse industry

The Army contract award will mean a hiring turnaround at Oshkosh Corp., which cut 760 jobs in the last year because of falling defense spending.

In October 2012 and April 2013, Oshkosh Corp. laid off about 1,000 employees. About 1,400 workers lost jobs in Oshkosh and Neenah, an economic loss of about $90 million region-wide, according to East Central Wisconsin Regional Planning Commission numbers, after the drawdown of wars in Iraq and Afghanistan.

The Department of Defense sets aside money for communities that suffer an uptick in unemployment after federal funds evaporate.

In 2013, the DoD issued ECWRPC a grant to foster new industries and protect displaced workers following layoffs at Oshkosh Corp. That money – nearly $2 million – funds ongoing plans to diversify the greater Oshkosh region by building an aviation industry. Local stakeholders plan to finish that blueprint by year’s end.

Oshkosh City Manager Mark Rohloff said though the contract will mean more focus on supplying Oshkosh Corp., those companies realize the need to supply an array of industries.

“The ripple effect will be tremendous for the region, by them picking up employment it’s just going to benefit the region … it’s potentially a 25-year contract.”

Oshkosh Mayor Steve Cummings said after the press conference Wednesday that the contract award will help attract young talent to the city of Oshkosh, as the company seeks to hire workers like engineers.

“I think it’s a very exciting day for Oshkosh Corp. for the employees, for their families and certainly for the City of Oshkosh,” Cummings said. “The name Oshkosh historically has been synonymous with quality products … Anything made in Oshkosh has a quality reputation.”

Reach Nate Beck at 920-858-9657 or nbeck@gannett.com; on Twitter @NateBeck9