"A camel is a horse designed by committee." -- Anonymous
The Pentagon knows this maxim all too well. According to DefenseNews.com last week, the U.S. Army will soon launch a $10.8 billion project to "upgrade" 60,000 Humvees with new armor. In the process, I fear they'll just create something weird, ungainly, and not terribly useful.
"Wouldn't it be neat if … "
The Army wants to make Humvees more or less as tough as the mine-resistant, ambush-protected vehicles (MRAPs) manufactured by General Dynamics (NYSE: GD), Navistar (NYSE: NAV), and Force Protection (Nasdaq: FRPT). But they also want to keep those Humvees lighter than the Oshkosh (NYSE: OSK) -built "M-ATV," the smallest MRAP.
Good luck with that.
The Humvee was designed to be a 21st century upgrade of the WWII Army Jeep, and it achieved that goal. But the Humvee was designed to move people and supplies, not traipse through minefields.
For that mission, the Army invented the MRAP, which has an admirable record of getting blown up by Iraqi IEDs, and surviving. Alas, MRAPs weigh too much and guzzle gas.
To fix this problem, the Army asked General D, Navistar, and Lockheed Martin (NYSE: LMT) to design a Joint Light Tactical Vehicle that would be survivable, like an MRAP, but lighter and more fuel efficient. So far, the project is flailing. Not a single variant has achieved the Pentagon's weight limit. Already, deficit hawks in Congress are calling for JLTV's termination.
The $10.8 billion camel
Are you seeing the pattern yet? You can build a bomb-resistant truck, but it'll weigh a ton. Or you can build a light truck, but it'll be vulnerable to mines. Try to do both things at once, and you've got a problem. Problem is, the Army's now trying to do just that. Compounding their error, they're not even designing a bomb-proof jeep from the ground up. Instead, they're taking an existing Humvee chassis, never designed to survive an IED blast, and trying to pimp the ride to give it MRAP-survivability.
It won't work. It's expensive, and a dumb idea.
In killing General Electric's (NYSE: GE) "alternative" F-35 engine earlier this year, Congress demonstrated that expensive, dumb ideas can't survive in an era of $1.3 trillion deficits. My advice: Don't bet on any defense contractor winning a Humvee upgrade contract. This project is doomed.
Meanwhile, MRAPs may have a future, and Oshkosh has taken pole position on this vehicle's evolution. Keep a close eye on its progress by adding Oshkosh to your Fool Watchlist.
