Oshkosh, Workhorse CEOs Talk About Mail Truck Contract Fight

April 28, 2021 by Jerry Hirsch, @Jerryhirsch

Oshkosh Corp. won the U.S. Postal Service contract to replace its fleet of aging mail trucks in a fair competition, and the company can quickly ramp up production of electric vehicles for the agency, according to its chief executive.

John Pfeifer, Oshkosh’s chief executive, provided the company’s perspective on the controversial contract during a conference call outlining its second-quarter financial results with industry analysts on April 28.

Duane Hughes, the chief executive of Workhorse Group, also address the issue during an earnings call on May 10.

The Postal Service awarded Oshkosh the contract – which could be worth more than $6 billion over its life – in February. The company beat out Workhorse Group, a small electric vehicle startup.

Workhorse is considering how to challenge the contract and has appealed to members of Congress to intervene in the award.

“We continue to operate under our NDA with the U.S. Postal Service. As previously disclosed, we requested pursuant to the publicly provided bid process rules, additional information from the U.S. Postal Service and had a scheduled face-to-face meeting with the USPS on March 3. We are continuing to evaluate our options and intend to continue to explore all avenues that are available to us,” Hughes told investors and analysts during the earnings call.

He declined to provide any more information, citing the confidentiality agreement Workhorse has with the Postal Service.

Under the terms of the deal, Oshkosh, Wisc.,-based Oshkosh will get a $482 million contract to complete the production design of what the Postal Service is calling the “Next Generation Delivery Vehicle.”

The agreement also provides Oshkosh funds to pay for tooling and factory configuration needed before launching production. About 10 percent of the vehicles would be electric.

The program covers the purchase of 50,000 to 165,000 units over 10 years.

The post office now uses about 140,000 Grumman Long Life Vehicles for its main delivery service. Manufactured from 1987 through 1994, they need to be replaced. A 2014 audit from the USPS inspector’s office found that the current fleet could only meet the agency’s delivery needs through the 2017 fiscal year.

Workhorse has argued that its electric-only offering fits with President Biden’s executive order directing federal officials to draw up plans to convert the federal government’s 645,000-vehicle fleet to “clean and zero-emission vehicles.” While that includes mail trucks, the Postal Service operates as an independent agency with its board of governors that decides how its funding is spent.

In the conference call, Pfeifer said Congress doesn’t have a role in selecting mail truck vendors.

“The U.S. postal service program funding is not subject to approval from Congress. So there is always some remote risk that Congress could exert some influence on the award, but that would be unprecedented, and it would have really no basis because we provided the absolute best solution for the U.S. postal service. And it does what everybody in Congress wants, I think, which is electrifies and makes the fleet zero emission over the life of the contract,” he said.

Jerry Hirsch April 26, 2021
Volvo Trucks is pushing rapidly into heavy-duty electric trucks and believes that they could be accounting for half its sales in some markets.

10 Responses

  1. Jay

    Fairly, by telling USPS to delay it until they had a rendering ready and all the senators bought in… Now they’re just rubbing salt in the wound. They had the answer, after delaying USPS the award for two and a half years with a ripoff rendering that looks just like the workhorse entry and magically it’s an EV as well. What a joke, it will never get investigated because politicians are behind the award even though it’s not like they loaded prior to the award or anything, that’d be illegal… When was that prototype tested? oh, never? how did they win? oh bribery, right…

    Reply
    • R

      Are you sure that the pics released are the winning bid(stock pics) Ford is selling f150 mustang and transit vans all electric by year end… …. Oshkosh prototype was built on the transit chassis. What makes sense here

      Reply
    • j

      You will have to remind me, what is Oshkosh and their CEO being sued for misleading investors or Workhorse? Oh yeah. Workhorse.

      Reply
    • R

      Also if you want to get the best price on a large quantity of van chassis would you announce that you are buying them from one company or Pitt the possibility of another supplier until the deal is finalized. Hmm I know what I would do. Not comment until the negotiations were done. Sounds like good business practices to me.

      Reply
  2. Derek

    While I wanted Workhorse to win, I not surprised, they are just too small of a company, and didn’t command enough trust for an award of this size.

    Reply
  3. recon

    Keep all Vehicles running on Gasoline like they have been doing for Hundreds of years now. Keep all Electric where it’s needed to survive, not to operate Motor Vehicles.

    Reply
  4. k

    Jerry, can you do a follow up with Oshkosh Defense regarding prototype, manufacturing location etc?

    Reply

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