PARIS -- Oshkosh is not the only American defense company to look to international markets to seek growth as the U.S. cuts its defense budget, but it does provide a striking example of one looking towards North Africa and the Middle East.
Oshkosh Defense is moving its headquarters to Abu Dhabi, in the United Arab Emirates, from Dubai where it first built its international headquarters in 2006. Serge D. Buchakjian, senior vice president and general manager for Oshkosh Defense international, said it makes sense to keep the headquarters in the Middle East to capitalize on the deeper defense pockets in the region.
North Africa and the Middle East is the common answer when executives are asked on the show floor here where they can find growth. With Europe defense budgets experiencing more drastic cuts than the U.S., the choices are sparse, although Latin America, especially Brazil, and Asia are also mentioned.
John Urias, president of Oshkosh Defense, said his company has received interest from Saudi Arabia and the UAE in its family of vehicles to include the Mine Resistant Ambush Protected truck, which has ended production for the U.S. The end of production for the Pentagon means Oshkosh does not have to go through the foreign military sales process to sell MRAPs to other countries buoying hopes for future orders.
"There are pros and cons to the FMS process but it does help in the sense some countries would prefer to buy direct," Buchakjian said.
Additional MRAP purchases would be further positive news for a company whose defense future looked in question last year with the U.S. MRAP contract coming to an end and the Family of Medium Tactical Vehicles program operating in the red.
Officials have since announced in January the company has found enough efficiencies in production to again turn a profit on the 5-year, $3 billion contract to build up to 12,415 trucks and 10,926 trailers for the U.S. Army. The announcement was sooner than many defense analysts expected.
Oshkosh also won a bid to build 5,244 M-ATVs for the U.S. with the bulk of the orders going to the Army and the Marine Corps.
Urias said he is confident in his company's bid for the Joint Light Tactical Vehicle contract to build the Humvee replacement for the Army and Marine Corps. The U.S. Army is expected to choose the three companies that will partake in the Engineering and Manufacturing Development phase of the program in August, although the decision has been repeatedly delayed.
Buchakjian expects a further boon in tactical wheeled sales as he sees investment in airborne platforms leveling off and the modernization returning to ground fleets. Although, the growth, of course, will be determined by shrinking defense coffers across the globe.