GLOBAL DEFENSE MARKET

NEWS FROM DSEI: Oshkosh Pursuing New European Opportunities for JLTV Sales

9/11/2019
By Yasmin Tadjdeh

Photo: Oshkosh

LONDON — With Oshkosh Defense already pumping out thousands of joint light tactical vehicles for the U.S. Army and Marine Corps — and thousands more on the way — the Wisconsin-based company is seeking to bolster its international footprint.

The contractor is eyeing a new opportunity with Slovenia, which recently indicated an intent to purchase 38 systems, said Mike Ivy, senior vice president and general manager of international programs at Oshkosh.

The government of Slovenia recently signed a letter of authorization with the U.S. government to move forward with the buy, and Oshkosh expects to have that contract signed in December, Ivy said on the sidelines of the Defence and Security Equipment International conference.

“Thirty-eight doesn't sound like many ... but 38 is very important,” he said. “That would really make Slovenia the first country in Europe to have fielded JLTVs. And we think that's pretty remarkable.”

Additionally, in late August, the State Department approved a possible foreign military sale to Lithuania of 500 JLTVs and associated support for an estimated $170.8 million.

The sale “will help improve Lithuania’s light tactical vehicle fleet and enhance the capabilities to meet current and future enemy threats,” according to a State Department statement.

Five-hundred platforms would be the quantity ceiling for the purchase, Ivy said.

“We expect the initial buy will be 200-ish,” he said.

Meanwhile, the company is waiting for a major FMS deal with the United Kingdom to come through. The potential sale — which has a value of more than $1 billion — was announced in 2017 with a ceiling of more than 2,700 vehicles. However, a formal contract is still pending, Ivy noted.

“We don't expect their first buy to amount to that. Their first buy will probably amount to 850-ish vehicles,” he said. But “right now we're waiting for the U.K. acquisition bureaucracy to wind its way through its course before they can place the order.”

Oshkosh is ready and anxious to receive the green light, but Ivy said there have been some “bureaucratic snags along the way.” However, the company does not sense there is any opposition to the purchase.

“Certainly, the end customer and the acquisition community are fully on board with the JLTV and its capabilities as the right vehicle for” the United Kingdom, he said.

The last big hurdle is what is known as a main gate review, Ivy said. Based on recent conversations with the U.K. government, Ivy expected that milestone to happen sometime in spring 2020.

“We're a few months away and that's sort of the last hurdle that they've got to get over before they can award a contract,” he said.

The delay, however, hasn’t had a negative impact at Oshkosh's JLTV production facility, he said.

“We’ve got orders with the U.S. government for about 11,000 vehicles,” Ivy said, noting that the U.S. military awarded the company a contract for full-rate production this summer. “We're very busy with our U.S. government business, and while we're anxious for this order from the U.K., it's not impacting what we're doing or not doing on the production floor at Oshkosh.”

Meanwhile, the company is looking beyond Lithuania, Slovenia and the United Kingdom at the European market for new customers.

“We are working several opportunities, both FMS and direct commercial possibilities here on the continent,” Ivy said.

Oshkosh recently demonstrated the JLTV in Sweden and is seeking business with Northern European nations, he added.

“There were a lot of representatives at the trial and the truck performed very, very well,” he said. “People were very impressed with it, and so we think that there's a good deal more interest there.”

The company also held a demonstration on a firing range in Slovenia and shot off a Spike anti-tank missile, which is a common weapon in Europe, he said.

“There were lots of ‘oohs’ and ‘aahs' and interest in that capability as well,” he said.

However, with a glut of indigenous truck and vehicle manufacturers in the region, there is stiff competition, he said.

“The European market is a very difficult market to crack because there are excellent truck makers and vehicle makers in Europe,” he said.

But Oshkosh is confident that no other manufacturer can match the JLTV’s mobility over complex terrain, the protection offered in the platform’s weight class and its overall reliability, he said.

“That’s the importance of getting the JLTV into trials and demonstrations," Ivy said. "It’s one thing to see it on a showroom floor. It’s another thing to get into it in a demonstration" and see it operating.

The next confirmed demonstration will be at Millbrook Proving Ground, United Kingdom, in September 2020, he said.

Oshkosh also sees a growing trend for foreign nations to require some indigenous industrial participation in military equipment deals, Ivy noted.

“We see more and more demand for what we call local content,” he said. “They recognize they're spending a good deal of their national wealth to buy vehicles like the JLTV and they would like some local content" to be included.

While the JLTV is built entirely in Oshkosh, Wisconsin, and most of its supply base is in the United States, the company would consider building some components abroad, Ivy noted. It would also welcome service and repair agreements with indigenous companies and does so already with other vehicles its sells.

Beyond Europe, Oshkosh is looking for opportunities in places such as the Middle East — where it held three demos over the summer — and the Asia-Pacific, Ivy said. He declined to disclose specific countries in those regions that the company is pursuing.

Topics: International, Global Defense Market

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