Officials Forecast Lean Times for Military Trucks

MONTEREY, Calif. — The sun has begun to set on an unprecedented decade for the military truck market.
Officials speaking at the National Defense Industrial Association's annual tactical wheeled vehicle conference tried to break the news in lighthearted ways to industry. One official used a cartoon of a giraffe unleashing a string of profanities while drowning in quicksand. Another modeled his speech after a priest's sermon, commanding industry to go forth and find cheaper ways to develop products.
Though no one had hard numbers for how much the fleet would shrink, the message was clear: The Army must get rid of thousands of trucks and it will not buy as many in the future.
The service already has completed three studies that recommend reducing the fleet by 24,000 vehicles. Now the Army's Training and Doctrine Command, along with the Combined Arms Support Command (CASCOM), wants to define more clearly what the Army of 2020 will need, said Maj. Gen. James L. Hodge, commander of CASCOM's sustainment center of excellence.
“You can be sure that additional tactical wheeled vehicle reductions will be a part of those designs,” he said.
The not-so-rosy outlook for the truck fleet is the result of a perfect storm — two land wars ending, reductions in anticipated budget increases and a military-wide shift back to air and sea postures.
The bleak predictions have some in industry looking to international markets. Some executives say that they don't think there will be enough money in the Army's plans to sustain the tactical wheeled vehicle industrial base. Making matters worse, they will have to navigate strict International Traffic in Arms Regulations that make it difficult to sell products to foreign countries.
The Defense Department is focusing on capability, and no longer the quantity of trucks, said Paul Mann, assistant deputy director for ground systems in the office of the undersecretary of defense for acquisition, technology and logistics.
“You have to learn how to count your dollars and you have to learn how to count our dollars,” he told industry representatives. “We have to have enough to do everything we need to do, and we can't spend a lot of money on stuff we don't deliver.”
The Joint Light Tactical Vehicle program, which officials at the conference repeatedly touted as a success story, will be the military's first attempt to craft a program where affordability is a key criterion, Mann said. It is the model going forward, officials said.
The program almost died after the Army and Marine Corps seemed at odds over requirements and lawmakers recommended eliminating it. But the Army has just released a request for proposals for the JLTV and wants to buy 23,000 by 2025 to replace a portion of the up-armored Humvee fleet. A program to upgrade others in the fleet has been suspended.
For now, the Army is banking on JLTV to carry the truck fleet of the future. Leaders consider it their Number 3 priority, after the network and the Ground Combat Vehicle.
Affordability is the name of the game. Officials are looking for requirements they can retreat from, alter or at the very least debate, Mann explained.
“We're not going after the profits of companies, we're going after costs,” he said. 
During a keynote address, Army Lt. Gen. William Phillips, principal military deputy assistant secretary of the Army, urged companies to play their own versions of “money ball,” taking inspiration from Oakland Athletics general manager Billy Beane, who put together winning teams despite having one of the lowest payrolls in the league.
“We all run businesses and we have shareholders, stakeholders, employees and families,” said Pat MacArevey, vice president of government business at Navistar Defense. “Whether it's good news or bad news, sharing our customer's outlook is incredibly valuable to our planning process . . . Though it may not be, 'We're going to buy a lot of trucks in the future,' it's real and we appreciate it.”
But a week before the release of a delayed budget, there is only so much military officials have been able to tell companies that are seeking information about what opportunities will remain for the tactical wheeled vehicle fleet.
“The only certainty we know about future challenges is that they are uncertain,” Mann said.
One thing is known, officials said. Army studies have shown that there is a tactical wheeled vehicle for every four soldiers, and that ratio won't stand.
“While that shows we have a very mobile force, it also comes with a significant sustainment cost,” Hodge said. “This is especially true due to the many older tactical wheeled vehicles that remain in our fleet.” The money needed to repair and maintain the older vehicles could be spent on other priorities, he said.
“We have to get rid of a lot of tactical wheeled vehicles,” added Christopher Lowman, assistant deputy chief of staff and director of maintenance policy and programs for the Department of the Army.
The service may do away with 30,000 to 40,000 vehicles in the current fleet of 260,000. “And that's before the Army restructures” and becomes a smaller force, further reducing the need for more vehicles, Lowman said.
The latest estimates call for the divestment of 1,205 mine-resistant ambush-protected and 36,500 other tactical wheeled vehicles. So far, the Army has taken 105 MRAPs and 4,500 other trucks off its hands, Lowman reported.
But it's not all doom-and-gloom, he said.
“As our modernization budgets come down and our production requirements come down, there's an opportunity here to partner with those [manufacturers] and other companies to help sustain our fleets of equipment,” he said.

Topics: Business Trends, Doing Business with the Government, Defense Department, DOD Budget, Land Forces