Navistar still fighting for $3.3B Pentagon M-ATV contract
By: Paul Merrion July 31, 2009
(Crain's) -- Navistar Corp. is still fighting an uphill battle to win back a piece of the huge rush order it lost in June to build rugged all-terrain vehicles for the war in Afghanistan.
The Warrenville-based truckmaker confirms that it has met with members of Congress and the Pentagon to discuss splitting the Army's plans to buy more than 5,000 of the armored troop carriers from only one contractor by yearend.
"We felt it was necessary to let people know we have a vehicle ready to go if a multisource strategy is needed," said a Navistar spokeswoman. "We're standing by to help if that need should arise."
Navistar's stock dropped from the mid-$40 range to below $38 in heavy trading during the first few days of July, shortly after it lost the closely watched $3.3-billion M-ATV deal to Wisconsin-based Oshkosh Corp. In recent years, Navistar has won the lion's share of contracts for thousands of mine-resistant armored military vehicles for the war in Iraq, helping offset recent declines in civilian truck sales.
The stock was trading at $39.49 midday Friday, up 22 cents, or 0.6%.
The Navistar spokeswoman declined to comment on a report by the newsletter Inside the Army that Navistar was lobbying to block Oshkosh from getting additional pieces of the order until it proved it could meet the initial production targets. "We're not going to elaborate on our competitor's capabilities," she added.
According to that report, Navistar has briefed lawmakers from Mississippi, where its M-ATV would be built, saying in a slide presentation that Oshkosh "has no history of 500 units per month, let alone 1,000 units per month of armored vehicles." Both of the state's senators recently have expressed concerns about getting the vehicles into Afghanistan quickly, the story said.
However, Oshkosh said this week that the recession has created slack for suppliers and materials, enabling it to ramp up production quickly. Its lobbyists have told lawmakers that the M-ATV contract is its "No. 1 corporate priority," according to the report.
One analyst doubts Navistar's lobbying effort will succeed. "I think the government has already made its decision," said Walt Liptak, vice-president and senior investment analyst at Chicago-based Barrington Research Associates Inc. "Oshkosh can deliver them by the end of the year."
An Army spokesman for the M-ATV program did not respond to requests for comment.
Comments (5)
Your "Navistar's Spiral of Despair" fixation may end up causing you to despair for losing your credibility as a "journalist", which you claim to be in your bio.
Yes, Navistar went through a spiral of despair that lasted many decades when it was called International Harvester, a company that started the invented equipment business and built it into the largest farm equipment monopoly the world has ever seen, only to self destruct and lose it all except for trucks and diesels.
After IH changed its name to Navistar, the Daimler tried to kill its class 8 business by buying market share. The Stuttgar people hired a local guy called Jim Hebe and gave him the marching orders: drive Navistar out of Class 8. Hebe almost made it. It did not quite kill Navistar's Class 8, but dropped it to last place and put Daimler's Freightliner to No.1.
During the last truck downturn, Daimler strategy backfired and F/L took a $1.4 Billion write off. The people in Stuttgart excecuted ('fired') Hebe, even though he had caried out their oders well.
During all that time, the Daimler people cowed the Navistar people and got them stuck in defensive trenches. For the las couple of years the Navistr people have come out of the treches led by a number of feisty generals, with James Hebe proving himself to be the Gerorge Patton of the Navistar counter attack which is causing Navistar to lift its market share which has just about doupbled in the last five/six years in Class 8.
So now Navistar is attacking the US Department of Defense. See how feisty they have become.
But you don't see it. I hope among your shortcomings is not included the fact that you are also a whimp and that you will post this message.
Posted by Shine | August 1, 2009 8:22 PM
Posted on August 1, 2009 20:22
http://www.chicagotribune.com/news/local/wire/chi-ap-us-oshkosh-vehicleco,0,7517610.story
Posted by Shine | August 1, 2009 9:55 PM
Posted on August 1, 2009 21:55
Of course we'll publish every one of your comments, Shine. Without editing them, and just as they arrive.
Nothing whimpish (sic) about this: we enjoy a good laugh, and, in this regard, you are a very generous fellow.
Posted by Oliver Dixon
|
August 1, 2009 11:27 PM
Posted on August 1, 2009 23:27
Feisty? Calling them crybabies seems more accurate. If you don't get what you want, just lobby, complain, decieve, and sue until your opponents give in- that's the Navistar way and it is sad!
Posted by CL | August 3, 2009 1:43 PM
Posted on August 3, 2009 13:43
Shine...you must be great at a party around the bar. You can certainly spin it to suit your audience. The problem here is you're riding the wrong horse in a race you're going to lose. All your generals (emperors) have no clothes. You may think Jim Hebe is General Patton, but he appears to be more like Confederate Maj. Gen. Pickett sending his troops in to fight admirably but get figurately mowed down by superior forces that are more thoughtfully placed.
Navistar has lived off of government contracts for the past couple of years. Now those contracts are being lost and suddenly the tactics coming from Chicago are puzzling and seemingly desperate. I don't expect Navistar folks to see this as clearly as everyone else, but that doesn't mean it's not happening. The end of your campaign of deception is near and industry folks are starting to catch up to your bait and switch tactics.
It is frequently said in American business that "the best customer is an educated customer".
Navistar's version of that statement should read "the best customer will be one that is either uneducated, gushing with sympathy for my unnaturally desperate position, or simply exercising individual rights to be a part of the slow train wreck that is happening before their very eyes."
Posted by Smart Guy | August 3, 2009 9:32 PM
Posted on August 3, 2009 21:32