Wisconsin-based Oshkosh Corporation has bagged $6.75 billion contract from the U.S. Army and Marine Corps to deliver new military light trucks.
The close to $7 billion contract would task Oshkosh Corp to deliver almost 17,000 new light trucks to replace the dilapidated Humvees used in Iraq and Afghanistan, according to the Wall Street Journal.
The company that still takes pride for building the country's very first four-wheel-drive truck, known today as "Old Betsy", will now have a stable flow of earnings for the medium term and redound to steady employment for the town of Oshkosh in Wisconsin.
For the next 25 years, Oshkosh needs to deliver as many as 55,000 Joint Light Tactical Vehicles to replace part of the Humvee fleet and some larger military trucks, the Washington Post reported.
Oshkosh Chief Executive Charles Szews said in an interview that this is a historic win for the company and it "supports the whole infrastructure for the company."
The company, which also produces specialty vehicles including firetrucks and cement mixers, had been saved by this contract as listed shares went up as high as $43 a share after the Tuesday announcement. The contract erases the 20 percent decline manifested by Oshkosh stocks early this year.
Although the other firms who participated in the bidding led by Lockheed Martin and AM General would still be given time to contest the win of Oshkosh, Army Program Executive Office Combat Support & Combat Service Support chief Scott Davis said "there is no expectation of a protest,"reported Defense News.
The U.S. military's JLTV program was launched in 2007 and it had faced stumbling blocks including a series of cost overruns and canceled programs. Stuck to its $250,000 price cap for each JLTV, 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 estimated to hit $30 billion – the largest military contract so far in recent years, the WSJ added.
It is the aim of the U.S. Army and Marine Corps' JLTV program to restore the flexibility and mobility of armored vehicles that are transported using CH-47 Chinook, CH-53 heavy-lift helicopters and by amphibious vessels, according to Defense News, which adds that the JLTV trucks should be both light enough for transport but heavy to protect deployed military from ground attacks.
