Oshkosh [OSK] continues to ramp up production of the Joint Light Tactical Vehicle (JLTV) for the Army and in anticipation of increased demand overseas, according to President and Chief Executive Wilson Jones.
JLTV is currently in low-rate initial production, but a decision to enter full-rate production (FRP) is expected in early 2019, Jones said Jan. 25 during a quarterly earnings call.
“We expect more JLTV orders later this year,” Jones said. “We also continue to promote the JLTV with the international community, both in terms of trade shows where the JLTV recently generated significant interest in Dubai and through individual customer discussions where U.S. allies are looking for the best tactical vehicles.”
Oshkosh is planning on international orders for JLTV to flow in after the Army and Marine Corps declare FRP in 2019. Sales should begin in 2020, Jones said.
“We also remain in pursuit of additional international orders for Oshkosh defense products and services,” he said. “We saw tangible progress in the quarter on one of the deals we were actively engaged in as the proposed contract moved to the next step in the approval process.”
Jones said Oshkosh Defense has excess capacity on the production line to accommodate significant international orders for the vehicle.
“We’re looking at it from a capacity planning standpoint and don’t anticipate any problems, ramping up JLTV international orders,” he said. “They’re not all clear in focus yet. We’re just starting a lot of discussions, a lot of interest, but at this point, if you dial back to when we were building M-ATVs back in 2009, we were building 1000 of those a month. So, we have the capacity here to ramp up JLTV and we’ve got a slow ramp up now. … But we’re positioned well to build in international JLTV orders.”
The Army in December placed a $100 million order for 258 additional JLTVs for delivery in 2019.
“Over time, we are confident there will be opportunities to expand this powerful vehicle platform to include new variants and configurations,” Dave Diersen, vice president and general manager of joint programs at Oshkosh Defense, said when that contract was announced. “We also see significant international market potential for allies requiring a tactical wheeled vehicle proven to provide the ballistic protection of a light tank, the underbody protection of an MRAP-class vehicle, the network capability of a mobile command center, and the off-road mobility of a Baja racer.”
Oshkosh also is competing to hold onto its contract to build the Army’s Family of Medium Tactical Vehicles. The Army decided to recompete that contract in 2017 as it seeks a more capable, survivable version of the utility trucks. Jones said a decision on that program is expected sometime this quarter.
In the meantime, the company continues to deliver FMTVs according to its obligations under a contract that expires in 2020.
“We believe the supplier of the new FMTV A2 version will begin to ramp up production in … 2021,” he said.