Oshkosh, Union Start Contract Talks to Aid Military Truck Bid

By Bob Tita 
 

Specialty truck maker Oshkosh Corp. (OSK) and the United Auto Workers Union will begin talks on a contract extension aimed at helping Oshkosh's bid to build a vehicle to replace some of the U.S. military's Humvee utility trucks.

Union members voted Tuesday in favor of commencing talks with the Oshkosh, Wis., company. Oshkosh is asking for a five-year extension to the union's current contract, which expires in 2016. The union represents about 1,800 production workers for Oshkosh's defense business.

The company wants a long-term labor contract in place to help manage its costs as it prepares a bid for the joint light tactical vehicle, or JLTV. The U.S. Defense Department is expected to award a production contract for the vehicle in 2015.

Oshkosh is one of three finalists for the contract, along with Humvee maker AM General LLC and Lockheed Martin Corp. (LMT). The three companies this summer delivered prototype vehicles for testing and performance evaluation over the next year. Military planners once viewed the JLTV as replacement for all of the 130,000 Humvees in the service. But cuts in defense spending caused the Pentagon to scale back the JLTV program. The Army wants to assemble a fleet of 20,000 JLTVs over 20 years, while the Marines anticipate purchasing about 5,500 trucks.

Oshkosh has built a variety of cargo and heavy-haul trucks for the U.S. military. It also built more than 8,700 all-terrain armored patrol trucks for U.S. troops in Afghanistan. The truck provided Oshkosh with a set of battle-tested systems and components to incorporate into its entry for the JLTV contest.

Oshkosh's stock Tuesday closed up 0.47% at $47.01 a share.

Write to Bob Tita at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires