Oshkosh Defense to build new USPS fleet out of state

No viable facilities in Wisconsin, company says

Oshkosh Defense's Next Generation Delivery Vehicle. Photo courtesy of Oshkosh Defense.

Last updated on June 24th, 2021 at 12:11 pm

Oshkosh Defense will manufacture a new fleet of mail delivery vehicles for the U.S. Postal Service in South Carolina as the company says it struggled to find a viable building for the project in Wisconsin.

Oshkosh Defense, a division of Oshkosh Corp., plans to open a dedicated facility in Spartanburg, South Carolina where it will hire more than 1,000 employees to build between 50,000 and 165,000 Next Generation Delivery Vehicles (NGDV) over a 10-year period, the Oshkosh-based manufacturer announced today.

The company says it will repurpose a 900,000 square-foot warehouse in Spartanburg’s Flatwood Industrial Park for its new $155 million manufacturing facility, which will begin NGDV production in 2023.

Oshkosh Defense will receive job development credits for the project, including a $9 million grant for costs related to the project, according to the South Carolina Department of Commerce.

“Upstate South Carolina has a skilled workforce and a proven history in advanced automotive manufacturing—it’s the perfect place to produce the NGDV,” said John Bryant, Oshkosh Corp. executive vice president and Oshkosh Defense president.

Site selection for the new facility came months after several Milwaukee Common Council members signed a letter urging Oshkosh Defense to build the facility in Wisconsin, and in Milwaukee’s Century City Business Park in particular.

However, Oshkosh Defense says it was unable to find a suitable location for the project in Wisconsin after working with Milwaukee 7, New North and the Wisconsin Economic Development Corporation, Bryant told BizTimes in a statement.

“Unfortunately, we could not identify an existing building (in Wisconsin) that was viable for this project,” Bryant said. “However, we are pleased to share that we have chosen to establish the NGDV Technical Center right here in Oshkosh, Wisconsin. The center will be staffed by over 100 team members who will provide engineering and program support for the NGDV contract.”

Bryant said site selection was based on several factors, including workforce availability, manufacturing infrastructure as well as proximity to both the company’s supply chain and USPS vehicle maintenance facilities. Spartanburg and neighboring counties also have a “high availability of skilled labor,” Bryant added.

“Due to the strict timing requirements for the program, building a new facility was not feasible,” Bryant said.

The state of Wisconsin has offered Oshkosh Corp. up to $55 million in tax credits since 2010, including $8 million for its new headquarters in 2018. To date, state officials have verified the company for $48 million of those credits after the company created 691 jobs of a planned 1,000 and invested $236 million of a planned $268 million.

Oshkosh had until Sept. 30, 2020 to hit at least 800 new jobs and meet its capital investment targets. The company’s performance report for what is the final year of the tax credit contract is not due until Sept. 30, 2021.

“WEDC is pleased and excited that our home state company, Oshkosh Corporation, is engineering the next generation of electric vehicles here in Wisconsin and will be leading the conversation about how we make the last mile of delivery an electric, climate-friendly solution,” Missy Hughes, secretary and CEO of the Wisconsin Economic Development Corp., said in a statement.

Bryant says Oshkosh Defense still has a “great relationship with Wisconsin,” and pointed to a $942 million contract it was awarded in June by the U.S. Army to integrate a 30mm Medium Caliber Weapon System (MCWS) onto the Stryker Double V Hull Infantry Carrier Vehicle.

“We are pleased to share that this work will be conducted right here in Oshkosh, Wisconsin,” Bryant said.

The USPS selected Oshkosh Defense for the multi-billion-dollar NDGV contract in February 2021 following a competitive selection process that began in 2015.

The NGDV fleet will be a combination of both zero-emission battery electric vehicles and fuel-efficient low-emission international combustion engine vehicles, according to a press release.

The new vehicles will replace the existing fleet of delivery vehicles, many of which have been in service for more than 30 years.

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