(Oshkosh photo)

JLTV with 30 mm M230 chaingun (Oshkosh photo)

WASHINGTON: Vehicle-maker Oshkosh Corp. executives said Thursday that they expect the company’s defense revenue to slip in coming months because of fewer purchases of Joint Light Tactical Vehicles.

The expected slowdown comes as the company, which has produced JLTV since 2015, prepares for the US Army to reopen the vehicle contract, with several companies hoping to knock off Oshkosh.

“As we look at 2022, as we’ve been saying over the last couple of years, we do expect that JLTV volumes are going to be lower,” Michael Pack, executive vice president and chief financial officer of OshKosh, told analysts on its quarterly earnings call. “That is going to put downward pressure on defense’s revenues.”

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Oshkosh Defense’s net sales totaled $650 million in the fourth quarter of fiscal 2021, up 5.1%, which the company attributed to higher demand for JLTV. Oshkosh maintains that it is well-positioned to win the Army vehicle contract. Its chances are certainly boosted by the fact that the company has built 10,000 of the vehicles for a lower price that the Army originally projected. The initial contract in 2015 has a maximum value of $6.7 billion for the delivery of 16,901 vehicles. In December last year, the service awarded another $911 million contract to Oshkosh for more than 2,700 JLTVs.

Fiscal 2022 budget documents show that the Army plans to buy 2,744 JLTV trucks and trailers, down from 3,398 the year prior. But the next big, long-term JLTV contract is expected to be worth some $12 billion.

Whatever happens, the JLTV program is a great “base” for the company for years into the future, according to John Pfeifer, Oshkosh’s president and CEO. Both the Army and Marine Corps buy thousands of vehicles from Oshkosh Defense every year.

“This JLTV program will go well into the 2040s, beyond 2040,” Pfeifer said. “That’s why I say this is a great base business. Now there’s going to be up years and there’s going to be down years based on presidential budgets and priorities and so forth and what’s happening around the world, but these are fundamental programs for the Army and the Marines to operate.”

From that base, the company expects to compete for “adjacent” competitions, Pfeifer said, like it did with the Stryker’s Medium Caliber Weapon System after its acquisition of Pratt Miller earlier in 2021. Pfeifer said other adjacent programs include the Cold Weather All-Terrain Vehicle, Optionally Manned Fighting Vehicle and the Enhanced Heavy Equipment Transporter.

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