A year-long continuing resolution (CR) threatens the ramp-up in Joint Light Tactical Vehicle (JLTV) production and other programs that need increased funding to speed manufacturing.
Under a CR, program offices are held to the funding level of the previous budget year. The government is operating under such a stopgap funding measure that expires at the end of April. Without a defense appropriations bill, the Defense Department could be forced to operate the entire fiscal year with fiscal year 2016 funding levels.
Dave Dierson, vice president and general manager of defense programs for JLTV producer Oshkosh Defense, said a yearlong CR could slow the projected ramp-up in vehicle production.
“A CR is always a hiccup for any program,” Dierson told Defense Daily in an interview March 31. “In general, from the acquisition side, when you are under a CR, the program can only expend dollars at the level of previous years, so when you are on a production ramp, that can make things difficult.”
Oshkosh Defense is an operating segment of Oshkosh Corp. [OSK].
Still, as an in-production program, JLTV is in better shape than new-start programs that are not allowed to commence under a CR because there is no new funding to get them started. Oshkosh is producing JLTVs at a clip – one drove past Dierson’s office window while he was talking to Defense Daily.
The company plans to produce about 750 JLTV trucks in 2017. Since the 2015 contract award, the Army has placed four JLTV orders totaling 1,398 vehicles on order, Dierson said. The vehicles are still in low-rate initial production (LRIP) with a decision on full-rate production expected in 2018.
“We have been increasing our production volume to meet those numbers and in anticipation of future orders,” Dierson said.
Oshkosh began delivering the first low-rate initial production vehicles to the Army in late September and will continue delivery of groups of vehicles at the end of each month until production ramps up to full-rate. The Army plans to buy about 50,000 JLTVs. The Marine Corps will purchase another 4,500 of the small trucks.
Despite the Army’s uncertain funding future, Dierson said the program was moving along smoothly. The Army is in the midst of an ambitious testing regime including performance and reliability testing of the LRIP vehicles. None of the testing has been delayed or otherwise adversely affected by the continuing resolution, he said.
The Army could potentially ask the company to build more than the 50,000 it already plans to buy, according to recent Capitol Hill testimony by Army senior leaders. The service in 2018 will have to decide whether to buy more JLTVs or rehab a portion of its legacy Humvee fleet, Lt. Gen. John Murray, deputy chief of staff for financial management, Army G-8, last week told members of the Senate Armed Services Committee airland subcommittee.
“We are going to have to make a decision on either we are going to have to buy more JLTVs to replace Humvees or we are going to have to start recapping the Humvee fleet we have,” Murray said.
The JLTV program of record will leave the Army with a tactical truck fleet of about half JLTV and half Humvee. The average age of the Humvee fleet is 9.5 years.
“We try to maintain less than 15 years, so we are in good shape for another couple of years in terms of the age of the Humvee fleet,” he said.
Oshkosh has not had direct talks with the Army about increasing its JLTV buy, but Oshkosh has enough production capacity to provide what the Army needs, Dierson said.
“In the case of JLTV, should the Army decide in their requirements they would need more JLTVs, we would be able to support that,” he said.
Oshkosh and the government designed JLTV to be an international program. The U.K. military already has committed to buying a number of the trucks. Oshkosh was at the International Defense Exhibition in Abu Dhabi to shop the vehicle around to other allied nations.
With its long history of tactical wheeled vehicle production and experience swiftly ramping production of the mine-resistant, ambush-protected all-terrain vehicle, Oshkosh expects that international orders will have no effect on production for U.S. forces, Dierson said.
“No other country will have an order anywhere near as large as the U.S. Army, so we expect any international orders would be able to fold into our current production,” he said.