NAVISTAR DEFENSE SHOWCASES MAXXPRO DASH WITH DXM INDEPENDENT SUSPENSION AT AUSA — Press Release

NAVISTAR DEFENSE SHOWCASES MAXXPRO DASH WITH DXM INDEPENDENT SUSPENSION AT AUSA

FORT LAUDERDALE, Fla., (February 24, 2010) Navistar Defense, LLC today will showcase its enhanced International® MaxxPro® Dash Mine Resistant Ambush Protected (MRAP) vehicle with DXM™ independent suspension for attendees at the 2010 Association of the United States Army (AUSA) Winter Symposium and Exposition.

“The Dash with DXM independent suspension demonstrates our work in improved performance as we continue to bring our significant design force to bear on product improvements for our warfighters,” said Regis Luther, vice president, military products and initiatives. “We are also focused on the swift delivery of this capability and have designed kits and rolling chassis to quickly retrofit the remainder of the MaxxPro and 7000 Series fleets if needed.”

The enhanced MaxxPro Dash with DXM independent suspension offers added mobility for off-road travel while still providing warfighters with Category I MRAP survivability protection. A number of other added features that are included on the enhanced Dash include insulation and door upgrades, as well as an inclinometer, which acts as a level and measures side slope during vehicle operation.

The DXM independent suspension solution is provided by Hendrickson Truck Suspension Systems and AxleTech International. Navistar selected this no-compromises suspension system after conducting an extensive trade study. The DXM design also minimizes the effort needed to integrate the system onto existing MaxxPro and 7000 Series vehicles should the military be interested in retrofitting the company’s fleets.

On February 16, Navistar received an order for 1,050 Dash vehicles, bringing the company’s total MRAP orders to 7,494. Navistar also has provided more than 8,100 International® 7000 Series vehicles to the Afghan National Army and Afghan National Police. These vehicles can also be upgraded with the DXM independent suspension.

Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International® brand commercial and military trucks, MaxxForce® brand diesel engines, IC Bus™ brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse® brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com/newsroom.

Rumor Of New MRAP Contracts For Afghanistan May Bouy Navistar

An internal memo from within the Department of Defense some how leaked out. It states that in support of the U.S. operations in Afghanistan a further 2,500 Mine Resistant Ambush Protected (MRAP) vehicles will be required. Over the last two years the focus of acquisition for these kind of vehicles has been the Oshkosh produced MRAP-AT which was the result of the MRAP-All Terrain Vehicle (ATV) contest. The MRAP-ATV requirements were for a lighter, more maneuverable vehicle able to operate better in Afghanistan’s rough terrain.

Navistar was unable to win the MRAP-ATV contest and have missed out on the several hundred million dollars worth of orders for those vehicles. If the memo is correct an order for over one thousand of their MRAP type vehicles for use in Afghanistan will be welcome. The U.S. military has spent a great deal on MRAPs to serve in Iraq and Afghanistan over the last five years. They now possess significant numbers of them and will use them for several years to come. There will be little need to buy more of them and this will affect Navistar, BAE Systems and Force Protection all who ramped up production to meet demand.

Navistar To Provide More Trucks To U.S. Army

The United States military has expended a great deal of logistics and support vehicles in Iraq and Afghanistan. These trucks have taken a beating both from heavy use and enemy attacks. The Army has let several contracts recently to repair, reset and replace them. Yesterday it was announced that Navistar would be awarded a contract to provide tanker trucks, wreckers and generic troop transport vehicles. The value of this contract is over $400 million.

Navistar was disappointed that it did not win a portion of the MRAP-ATV contract to provide the lighter vehicles for use in Afghanistan. That contract went to Oshkosh. This contract will offset some of the losses from not contributing to that effort. It also demonstrates that the U.S. has been able to grow a decent industrial base when it comes to logistic support vehicles.

Oshkosh Keeps Winning

Fresh off of winning two contracts for the new MRAP-ATV worth over a billion dollars for use in Afghanistan Oshkosh announced that they had won two smaller contracts. These are only worth about $36 million but indicate that the company is showing some strength. The first is for heavy trucks to support U.S. Army engineering troops. The second is to treat Army tanker trucks to protect against rupturing and burning fuel during transport.

The MRAP-ATV contract is probably the last major contract for these types of vehicles. The win by Oshkosh has already caused ripples through out the industry with Navistar and BAE Systems losing work and jobs. The U.S. military is thinking now how to fit the existing MRAP vehicles purchased for Iraq into their tactical organizations. The MRAP-ATV will be lighter and more maneuverable to support operations in rougher terrain.

Follow On MRAP-ATV Contract Awarded To Oshkosh

At the end of June Oshkosh won the initial MRAP-ATV contract from the U.S. Department of Defense. This one billion dollar contract was for over two thousand of the lighter and more maneuverable Mine Resistant Ambush Protected (MRAP) vehicles for use in Afghanistan. The DoD conducted a contest between a variety of companies that included a “drive off” to demonstrate capability. While it was thought that more then one company would win contracts only Oshkosh received an order.

Now it was announced today that Oshkosh won a follow on order for another seventeen hundred vehicles for another billion dollars. The company already had to invest in expanding its workforce and capability to meet the first one. Part of any contract award by the Defense Department is based on the winner’s demonstration that they are able to meet the production and quantity requirements so Oshkosh should be able to build these. The follow on award though will deal a further blow to Navistar, BAE Systems and Force Protection efforts in the MRAP business.

The U.S. had rapidly purchased a variety of different MRAP vehicles for about four years to provide protection for troops as they moved around Iraq. There is an on-going struggle how to fit these vehicles into their tactical formations now that those operations are winding down. The MRAP are big, road optimized vehicles and are not designed for use in rough terrain or combat. This is part of the reason that the Future Combat System (FCS) vehicle portion was canceled. There may soon be an end to the purchase of any large numbers of MRAP as future more tactical combat vehicles are purchased.

MRAP-ATV Fallout Leads To Navistar Layoffs

Oshkosh won the MRAP-ATV contract for a new vehicle for use in Afghanistan. One of the losing bidders was Navistar who had sold several thousand MRAP vehicles for use in Iraq to the U.S. Department of Defense.

Now with the fact that they did not win the contract to build the new vehicles for use in Afghanistan the company has announced layoffs at their Mississippi plant. This illustrates one of the problems with defense contracting. If you don’t continue to win contracts to provide systems or services you will eventually wither. Defense acquisition is normally for a certain number of units or for a period of time that will end. Companies win or lose contracts and that leads to contractions or expansions in work forces.

MRAP-ATV Moves Forward

In early March the Defense Department awarded a group of companies contracts to begin concept designs for the Mine Resistant Ambush Protected-All Terrain Vehicle (MRAP-ATV). Now it is being reported that the first production buy contracts may be awarded by May 1st. Crain’s Detroit Business says that the contracts had been delayed due to the short lived protest by Navistar. The Army plans to buy a small quantity of vehicles to do tests with and then order larger buys. The Defense Department had discussed in the past buying several of the proposed vehicles rather then focusing on just one.

This would mirror the experience had with the large MRAP vehicles bought for use in Iraq and Afghanistan to defeat the IED threat. Then due to the large quantities needed quickly several companies were able to win contracts. Part of this was that the U.S. military moved slowly first equipping engineering units and then the bulk of their infantry and other troops. This meant that the U.S.M.C and the Army bought different types for the missions. The MRAP-ATV will be used in Afghanistan where a lighter, more mobile off road vehicle is needed due to the rough terrain. This has been a more deliberate process then that used for the MRAP. Multiple contracts would allow faster equipping of units, but will also require a larger, more diverse logistical and training tail.

New MRAP Proposal Submitted by Oshokosh

As was written about at BNET: Government the U.S. military is moving forward with a new generation of MRAP vehicles that will be lighter and more maneuverable for Afghanistan. The Business Journal of Milwaukee writes that Oshkosh submitted its proposal on 9 January for the program. Oshkosh along with BAE, Navistar and Force Protection would seem to be the main contenders for the program. The MRAP-All Terrain Vehicle program will be managed like the recent JLTV award for multiple development contracts with a test and evaluation program for different vehicles. More then one successful design may be awarded production contracts as the program goes.

Canada Buys American Trucks from Navistar

Canada’s Government announced that they had placed a $274 million Canadian order with Navistar for 1,300 trucks to support operations in Canada. The Commercial Off-the-shelf (COTS) order was to replace aging trucks currently in use. The Gazette reports that there has been some criticism of the Government for buying American over vehicles made in Canada. The U.S. buys a great deal of equipment made in Canada, and many U.S. companies like Bell Helicopter and the “Big 3″ automakers have plants in Canada. The contract also requires Navistar to purchase $274 million in offsets which for a start will include the tires the trucks roll on. The U.S. and Canadian economies in many ways are integrated, so Canada turning to a U.S. company is not necessarily like buying from Europe or Asia.

Navistar Gets Contract for More MRAP Vehicles for Afghanistan

The US DoD awarded Navistar a $360 million contract to build 400 more lighter MRAP vehicles for use in Afghanistan. MarketWatch.com has the press release. This is on top of an order for 800 vehicles earlier this year. The MaxxPro Dash vehicles will be used while the new MRAP-ATV is developed and goes into production. Afghanistan is requiring vehicles with better off road performance due to its rougher terrain then in Iraq. MRAP vehicles tend to be tall and heavy and more suited for use on roads.

UK Buys More MRAP Vehicles

Navistar was awarded a contract by the Ministry of Defence to build MRAP vehicles. See the Chicago Tribune for the report. Like the US military the UK has put increasing amounts of funding into their MRAP fleet. The major threat in Iraq and Afghanistan remains IED and mines and the MRAP is designed to minimize the damage from these attacks. Even though Iraq may be winding down there is still a requirement for vehicles to support operations in Afghanistan.

Army announces JLTV teams


The US Army announced the three teams of companies that will be awarded development contracts for the Joint Light Tactical Vehicle (JLTV). The companies have a little over two years to develop a prototype vehicle for a series of tests. Then at least one, but hopefully from the DoD side possibly two, of the teams will be awarded production contracts. BAE is on two of the winning teams, those led by Navistar and Lockheed Martin. The third winning team was a new company, General Tactical Vehicles, made up of AM General and General Dynamics. The contract has the potential to be large with tens of thousands of JLTV vehicles being procured to replace the HUMVEE.

See Crain’s Detroit Business for the story.

Cross posted at BNET.

Navistar gets logistic vehicle contracts

Navistar was awarded two contracts by the Army to provide tactical support vehicles. These include one contract for tankers to carry fuel, oil and water. The vehicles are for use in Iraq and Afghanistan. Navistar has won several contracts to provide these kind of vehicles. One would have to assume that over the past seven years the Army has used a lot of these vehicles beyond what the originally intended. They will require either replacement or recapitalization, where they are rebuilt and retrofitted to be like a new one.

See the press release at MarketWatch.com.

Marines buy more MRAP vehicles

The USMC awarded Navistar a contract to purchase more of their new, lighter vehicles. The contract is worth about $750 M and will buy 800 or so vehicles. The trend in recent MRAP buys has been to get smaller and less bulky vehicles for service in Iraq and Afghanistan. The Marines especially have cut back on MRAP buys and moved away from the original vehicles.

Navistar makes the MRAP in Mississippi and the press release can be found at The Wall Street Journal’s MarketWatch.com site here.

More USMC MRAP contracts

According to this article Navistar International was awarded a contract by the US Navy to provide maintenance support for USMC MRAP vehicles. This contract is to provide parts and most likely Contractor Logistics Support (CLS) for the many vehicles that are being used in Iraq and Afghanistan. The contract value is over $700 M. It again illustrates that modern systems are not only expensive to procure but to maintain which opens up a whole new venue to defense contractors.

Navistar wins contract to build trucks for US Allies

The US Army awarded Navistar a contract for 7,000 odd trucks for the Afghan and Iraqi governments. The value of the contract is over $1B. See the press release here. This is on top of a previous award for vehicles and support for the US Army. Navistar is also bidding as part of one of the teams for the JLTV.

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