By Roxana Tiron - 10/26/09 11:06 PM EDT
The campaign is also meant to combat what Oshkosh officials see as unfair attacks from rival BAE Systems Inc. over a multibillion-dollar Army truck contract.
The Army in August awarded an estimated $3 billion contract to Wisconsin-based Oshkosh for building the Family of Medium Tactical Vehicles (FMTV). Two other competitors, BAE Systems and Navistar, separately protested the contract award with the Government Accountability Office (GAO) in early September. BAE, which previously held the contract for the FMTV, filed two supplements to its protest. GAO has until December to uphold or deny the protests.
The fight surrounding the FMTV contract is forcing Oshkosh — which for years has kept a fairly low profile — to step into the limelight.
Oshkosh’s Washington promotion comes on the heels of an intense lobbying campaign by BAE and outspoken support from BAE’s backers in Congress. BAE builds the FMTV in Sealy, Texas.
BAE has publicly called into question whether Oshkosh can fulfill its aggressive bid for the FMTV or carry the associated financial risk. Under the contract Oshkosh has to build the trucks, the government pays a fixed price, and cost overruns, if there are any, would have to be incurred by the company. BAE officials said that Oshkosh’s bid on the fixed-price contract was too low to be workable.
Sen. Kay Bailey Hutchison (R-Texas) charged that the Army will not achieve real savings by shifting the production of these vehicles “from the proven operation in Sealy and establishing an entirely new production capability at a company with no demonstrated experience in building this truck.”
Oshkosh has maintained that it won the contract because its proposal “represents the best value to the Army, its soldiers and the nation’s taxpayers,” company spokesman John Daggett said in a recent statement e-mailed to reporters. “We are confident the protest process will bear this out.”
The advertising campaign, with the tagline “beyond confidence,” is designed to “make sure that people understand that Oshkosh is a strong, viable company,” said Stawski. “It is a pretty diverse and … a financially stable company.”
Stawski said that the campaign was initially supposed to start last year, but because of the economic downturn that hit the construction business hard, it was put on hold. Now, with an anticipated uptick in the economy and the truck contract that has put Oshkosh on the defensive, company officials consider it a propitious time to “protect and enhance the Oshkosh brand,” said Stawski.
Oshkosh faced the possibility of bankruptcy earlier this year due to diminished demand for its commercial construction vehicles. The FMTV contract, as well as an estimated $3.3 billion award to build mine resistant ambush protected all-terrain trucks for U.S. troops in Afghanistan, are expected to give a much-needed cash injection to Oshkosh. BAE also lost the contract for the all-terrain vehicles to Oshkosh.
The D.C. blitz will focus on the various trucks Oshkosh builds for the military.
After winning the FMTV contract, the Wisconsin company now holds the majority of contracts for military trucks.
Oshkosh holds the contract for the Army’s heavy mobility tactical trucks and the contract for the Marine Corps’s medium tactical vehicles. Oshkosh owns the proprietary designs for its heavy trucks, making it the sole contractor for those vehicles.
However, the Army owns the designs for FMTV, making it easy for the service to compete the program and pick the companies that can produce the vehicles. The Army is also vying to eventually own the design for the heavy trucks.
Petri represents the Fond-du-Lac district where Oshkosh is based. According to financial disclosures, Petri owns stock in the company. Congressional rules do not deem it unethical for lawmakers to own stock in local companies unless they take direct congressional action to influence the financial well-being of those companies. Some lawmakers own stock in local companies in what they describe as a show of support for the local communities. Petri cleared the intent of the letter to Gates with the House ethics committee, according to his office.
Apart from defense trucks, Oshkosh builds access equipment, fire and emergency vehicles and commercial vehicles such as mixers, refuse collection trucks, truck-mounted cranes and hydraulic loaders. Oshkosh has several well-known brands under its corporate umbrella, such as JLG, Jerr-Dan, Pierce, McNeilus and IMT.