HUNTSVILLE, Ala. — Oshkosh Defense is preparing to close its Joint Light Tactical Vehicle production line by the end of 2024, after the Army earlier this year selected AM General to take over production of the Humvee replacement.
Wisconsin-based Oshkosh is still holding out hope the Army’s decision might be overturned, company President Tim Bleck, told Defense News in an exclusive interview March 22. The company in February filed a protest with the Government Accountability Office over the Army’s award.
“We’ve got a workforce that will produce these vehicles through the end of 2024,” Bleck said, adding that the company can accept orders until around the end of November 2023. Oshkosh has multiple foreign customers, including Montenegro, Brazil, Slovenia and Lithuania. Belgium, North Macedonia and Romania have said they will buy the vehicles.
The company is now weighing what to do with its workforce. Oshkosh is weighing opportunities to transfer its JLTV line to another product, Bleck said, but should an opportunity arise to build JLTVs once again down the road, “it’s hard to go back to tactical wheeled vehicles once you fill up the facility with something else.”
AM General has said it has 18 months — equating to a rough start time of August 2024 — to begin building new JLTVs. This start time, designated by the Army, is meant to avoid production gaps.
The Army’s contract to AM General is worth about $8.66 billion for 20,682 JLTVs and 9,8333 trailers. AM General, which has been owned by private-equity firm KPS Capital Partners since 2020, is now setting up its infrastructure at its 96-acre Mishawaka Manufacturing Campus in Indiana.
Oshkosh won the JLTV contract in 2015 to replace the aging Humvee fleet, beating out both Humvee-maker AM General and competitor Lockheed Martin.
The original JLTV competition included a requirement for the Army to own the technical data package with the idea that it would potentially hold new competitions to continue building the vehicle. In the latest competition, the service added some new requirements, including corrosion protection, improved fuel efficiency and anti-idle technology as well as lithium-ion batteries.
The GAO is expected to render a decision on the protest in June.
According to a redacted copy of the protest obtained by Defense News, Oshkosh contends the Army took “glaring risks” by selecting AM General, noting the company has “zero experience manufacturing the JLTV” and “by its own admission, must build out its own facilities before it can start production.”
Oshkosh says in the protest the Army did not appropriately consider AM General’s financial capacity.
“As other parts of the business are expected to have a temporary recovery, supply chain troubles and inflation will continue to place extreme burdens on cash availability forcing the organization to incur additional debt and increased credit risk,” the document reads. “This financial risk in conjunction with performance and schedule risk inherent with a new program mean [AM General] will continue to be a high credit risk until 2026 or beyond.”
On cost evaluation, Oshkosh writes in its protest that AM General “was proposing labor categories that were not appropriate for the work to be performed. Accordingly, the Army would have recognized the rates as unrealistic and made an upward adjustment.”
Additionally, the protest states that AM General “lacks the existing supplier relations needed to manufacture the JLTV.”
From the beginning Oshkosh has been focused “on driving our costs down through the supply chain, focused on continuous improvements and saving every penny that we could knowing that there would be a recompete seven years later, so we were laser focused on that,” Bleck said. “When we saw the other competitor’s proposal price, we said we couldn’t even touch that, we would incur a significant amount of losses at their proposal price.”
Jen Judson is an award-winning journalist covering land warfare for Defense News. She has also worked for Politico and Inside Defense. She holds a Master of Science degree in journalism from Boston University and a Bachelor of Arts degree from Kenyon College.
