Stakes are high—maybe $40 billion—for teams competing to build military vehicle
With the hard-working Humvee showing its age, Uncle Sam is preparing to buy a new ride for America's soldiers. That has touched off a hard-fought competition, with a dozen companies working in six teams to vie for the right to build the military's next-generation tactical vehicle. That list is scheduled to be cut in half next month, with the survivors entering a new phase lasting more than two years.
For the competitors—among them Warrenville-based Navistar International Corp. and Chicago aerospace giant Boeing Co.—the stakes are high: The contract to build the vehicle, to be known as the Joint Light Tactical Vehicle, or JLTV, is expected to generate tens of billions of dollars in sales spread out over a decade or more.
'Whoever wins this is in line to make one hell of a lot of money,' said Dean Lockwood, an analyst with Newton, Conn., defense research firm Forecast International.
The competition is still in its early stages and pricing issues remain open, but estimates from some participants that the contract could eventually generate $40 billion or more in sales are 'reasonable,' he said. By comparison, the controversial multiyear contract for the next-generation tanker jet involving Boeing is worth $35 billion.
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