Oshkosh Defense to build US postal vehicles; Workhorse Actions Slide

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In this news, we discuss the Oshkosh Defense to build US postal vehicles; Workhorse Actions Slide

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WASHINGTON (Reuters) – The US Postal Service (USPS) said on Tuesday it would award a 10-year, multibillion-dollar contract to Oshkosh Defense to manufacture a new generation of postal delivery vehicles.

As part of the initial investment of $ 482 million, Oshkosh Defense, a unit of Oshkosh Corp, will finalize the production design, testing and tooling of the vehicles required prior to production of the vehicles.

The contract, which could be worth more than $ 6 billion in total, allows the delivery of 50,000 to 165,000 vehicles over 10 years, which will be a mix of internal combustion and battery-electric vehicles. Oshkosh had partnered with Ford Motor Co on its proposal based on a Transit van.

USPS delivery vehicles that currently consume gasoline are on average almost 30 years old. An audit report last year found that the USPS alone spent $ 5,000 per delivery vehicle each year on maintenance costs.

Oshkosh shares rose about 6.1% news. Shares of Workhorse Group Inc, a losing bidder who sought to build electric-only vehicles, were briefly halted and lost nearly half of their value after the news.

Michael Shlisky, analyst at Colliers Securities, said the loss of the contract by Workhorse was “really serious. news for recent Workhorse investors. “

USPS, which began planning to replace the current fleet in 2015, said the new vehicles may later be equipped with “electric vehicle technology.”

The USPS fleet consists of more than 230,000 vehicles, of which 190,000 deliver mail.

The new USPS vehicles will begin delivery in late 2023 and will include air conditioning and heating, improved ergonomics and advanced vehicle safety technology, including air bags and 360-degree cameras. They will be able to transport more goods and better accommodate higher parcel volumes.

Last month, President Joe Biden promised to replace the US government’s fleet of approximately 650,000 vehicles with electric models. The White House did not respond to a request for comment on the USPS contract decision.

Reporting by David Shepardson; additional reporting by Ben Klayman in Detroit; Editing by Leslie Adler and David Gregorio

Original © Thomson Reuters

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