US Afghan Surge to Spur Niche Defense Orders
Tue Dec 1, 2009 9:59pm EST
* Niche orders for some defense companies
* No effect on cuts to major programs
* Oshkosh seen benefiting
excerpt
One of the companies likely to benefit most is Oshkosh Corp (OSK.N: Quote, Profile, Research, Stock Buzz), the Wisconsin-based company that is building thousands of armored all-terrain trucks for U.S. troops in Afghanistan, where 80 percent of U.S. casualties are caused by roadside bombs and other explosive devices.
Oshkosh is already due to build over 6,200 mine-resistant, ambush-protected (MRAP) all-terrain trucks, but deployment of 30,000 more troops to Afghanistan could result in orders for 2,000 to 4,000 more trucks, said Virginia-based defense consultant Jim McAleese.
Andy Hove, president of Oshkosh's defense unit, said his company was ready and able to build more trucks if needed. He said the Pentagon's initial requirements for the program had already called for manufacture of 5,000 to 10,000 trucks.
The company, which has rapidly increased its production rate over the last few months, expects to be producing 1,000 trucks a month by next month, and said it can continue producing trucks at that rate as long as needed.
More orders could generate an additional $800 million to $1.6 billion of revenue for the company, whose shares were trading 2.5 percent higher at year high levels of $40.74 on Tuesday afternoon. They closed 1.6 percent higher at $40.38.
reuters.com |
