Oshkosh Corp. won a $1.06 billion Army contract to build new, off-road terrain vehicles to outfit ground forces in Afghanistan, the Pentagon said late Tuesday.
The Oshkosh, Wis.-based vehicle maker beat out three teams for the deal to build 2,244 vehicles, including: BAE Systems, the U.S. subsidiary of subsidiary of British defense conglomerate BAE Systems PLC, Navistar International Corp., and Force Dynamics, a joint venture between Force Protection Inc. and General Dynamics Corp.
In after-hours electronic trading, shares of Oshkosh jumped $2.91, or 20 percent, to $17.45. The company's stock fell 25 cents to close at $14.54. Both Navistar and Force Protection shares fell nearly 9 percent and 22 percent, respectively.
Navistar, based in Warrenville, Illinois, said the outcome of the multibillion-dollar competition will not affect its previously stated guidance for 2009. A spokesman for Force Dynamics declined to immediately comment on the Army's selection.
The military has said it needs a hybrid armored vehicle to provide the same type of protection as mine-resistant, ambush-protected vehicles that have been used in Iraq. But it must be far more agile, lighter and provide increased maneuverability to handle Afghanistan's rocky terrain.
The Defense Department has previously said it could buy between 2,080 and 10,000 of the so-called MRAP-All Terrain Vehicles for use by the Army and Marine Corps.
Because of the urgent demand by the Pentagon for these vehicles, Oshkosh said it began daily production on its manufacturing line a few weeks ago.
"We and our suppliers have already made significant investments in materials and are well positioned to accelerate our manufacturing capabilities," said Andy Hove, Oshkosh executive vice president and president of the company's defense unit, in a statement.
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