in through the back door. Quantities bought may be trimmed ever so slightly, while delivery timelines are often lengthened, and a requirement may be watered down so that a cheaper alternative can, on paper at least, deliver.
Refurbishment programs to extend the life of a to-be-replaced fleet are another current favourite, while program slippage is another great way to pseudo-save money you don’t currently have. The slippage of the UK’s near-2,000 DROPS fleet replacement program which is currently anything up to eight years behind schedule is one example of this, while the recently further-delayed OUVS program is another. Official lines include a raft of excuses for delays in these and other programs, and while some of those hold limited water, ultimately delays are primarily down to funding, with money being spent on things that are currently a higher priority.
Such a priority shift benefits some,
but not others. In the US you’d not be happy if you were involved in the cancelled $160 billion FCS program, but if you build military trucks and/ or MRAPs you’d be over the moon. In the wider sense that is all probably good, as while the US defence sector is buoyant, the US commercial truck market has contracted around 40% during the current recession. Truck and engine maker, Navistar (certainly not alone in feeling the pinch) re-entered the defence sector in an attempt to boost revenues,
defence budgets dropped but as manpower levels dropped also, the amount of spend per man actually increased…
and since receiving its first sizeable contracts in 2005 had by early 2010 racked up approximately $7.6 billion in sales covering an estimated 28,000 vehicles… Another US company, Oshkosh Corporation, which has diverse interests (including construction) was also under the cosh, with some divisions seeing sales drop by 80%. And even with revenues being generated by ongoing deliveries of heavy trucks to the US military, shares (currently at $40.53) at one point dropped to $3.85… And while ‘saved’ may be a little dramatic, there is no doubt that the mid-2009 award of the OCO-related M-ATV award (so far worth at least $4.75 billion) and the more recent FMTV rebuy award (worth up to $3 billion) were a much- needed recession resistant (if not totally proof…) lifeline to Oshkosh in the worst period of recession the US has seen in 70 years…
Shaun Connors Defence Journalist
Oshkosh M-ATV Utility version (photo credit Oshkosh)
G4 DEFENCE
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