The American Oshkosh Corp. won an initial contract from the U.S. Army for its $30 billion program, the new Joint Light Tactical Vehicle. The other two competitors were Lockheed Martin Corp. and AM General, which is current Humvee’s producer.
The Army is looking to produce until 2040 a number of 55,000 multipurpose land vehicles both for its use and for the Marine Corps in order to replace the existing Humvee. It announced that the initial contract is worth $6.75 billion and it regards around 17,000 units.
The Wisconsin-based company saw a boost in extended trading after news emerged of its win, rising 10% to $42.55, with shares growing 1.5% at the close in New York. The surprise of the $30 billion program win was that Oshkosh ranks 99th in largest U.S. government contractors in 2014, while Lockheed, which lost in the race, was number 1 in the rankings according to Bloomberg data.
Charles Szews, the company’s CEO, said in a statement that “Oshkosh has been building tactical vehicles for the Department of Defense for 90 years, so no other company understands the role that tactical vehicles play in our troops’ lives better than Oshkosh.”
Previous deadly attacks on Humvees during the Iraq war pushed for efforts to be made to speed delivery of Mine-Resistant Ambush-Protected cars (MRAPs) instead of Humvees.
According to Army budget documents, the Joint Light Tactical Vehicle program would double its funding to $457 million by 2016 under Pentagon’s pending budget request, and it will reach $1.3 billion by 2018 and $1.8 billion in 2020.
By Gabriela Florea