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Electric TrucksModern ShipperNewsTop Stories

Oshkosh takes victory lap over Postal Service delivery truck contract

Contract won fair and square and Congress should stay out of it, CEO John Pfeifer says

Oshkosh Truck Corp. (NYSE: OSK) can make 100% battery-electric delivery trucks for the U.S. Postal Service, undercutting an assertion by Workhorse Group (NASDAQ: WKHS) that its being passed over for the contract dooms the mail service to remaining a source of planet-warming greenhouse gas emissions.

Not so, Oshkosh President and CEO John Pfeifer told analysts on the company’s fiscal second-quarter earnings call Wednesday.

“We can do 100% electric vehicles from Day One,” Pfeiffer said. “If the U.S. Postal Service came to us tomorrow and said, ‘We’ve got the funding to do 100% electric from 2023,’ we can do it.”

The key is the Postal Service having the money for all-electric vehicles (EVs), which cost more to acquire than vehicles with conventional powertrains. EVs make up the cost over time through better fuel economy and less maintenance. And they emit no tailpipe emissions.

The first tranche of funding to Oshkosh — $480 million over 10 years — is expected to result in up to 165,000 new trucks replacing an aging and fire-prone fleet. Oshkosh will deliver the first trucks — powertrain undefined — in the second half of 2023, Pfeifer said. 

“Our Defense segment will supply the Postal Service with as many zero-emission battery electric vehicles (BEV) units that they desire as they upgrade their fleet to be increasingly sustainable,” he said.  

Surprise award

The Feb. 23 award was a shock to many — including retail investors who had bid up Workhorse shares in anticipation that the electric delivery van maker was a shoo-in for the $6.8 billion contract.

Workhorse cried foul and said it might sue to get at least a piece of the contract, awarded by the independent Postal Service Board of Governors. Several Congress members from Ohio and other states said they would try to overturn the award to Oshkosh, based in the Wisconsin city of the same name.

Presidential politics may have played a part in the latter stages of the five-year competition that was narrowed to three finalists from seven companies. Besides Oshkosh and Workhorse, Turkish vehicle maker Karsan was in the final three.

Ohio-based Workhorse was seen by many as a favorite because former President Donald Trump carried red state Ohio in 2016 and 2020. But the oft-delayed awarding of the contract ultimately went to blue state Wisconsin, which narrowly favored President Joe Biden in the 2020 election. Postmaster General Louis DeJoy was appointed by Trump.

Workhorse, which is struggling to ramp up production of its C-Series composite body electric vans at a plant in Union City, Indiana, was expected to contract the Postal Service work to startup Lordstown Motors Corp. (NASDAQ: RIDE). 

Lordstown Motors (LMC) CEO Steve Burns founded and was CEO at Workhorse before leaving in February 2019 to start LMC in a closed General Motors (NYSE: GM) plant in northeast Ohio. Burns licensed Workhorse technology to build a commercial electric pickup truck called Endurance.

Fair and square

“I emphasize that we won this program. It was a five-year process, and we won this fairly,” Pfeifer said. “We know how to compete for government programs. It’s one of the things we know how to do. We won it fairly, and we won it because we have the best solution.”

Throughout Wednesday’s call, in prepared remarks and in response to questions from analysts, Pfeifer and Executive Vice President and Chief Financial Officer Michael Pack reiterated how proud the company was to be building the Next Generation Delivery Vehicles.

“I am very proud of the efforts … which supports President Biden’s goal to electrify the federal fleet with zero-emission vehicles and create new sustainable manufacturing jobs in America,” Pfeifer said. “First and foremost, this is great for the Postal Service and the postal carrier. But it’s also great for Oshkosh Corporation, and it’s great for our shareholders.”

Stand down, Congress

Congressional interference in the contract award would be “unprecedented,” Pfeifer said.

“It would have really no basis because we provided the absolute best solution,” he said. “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.

“The discussion in Congress recently that you’ve heard has really not been about changing the contract. It’s been about increasing the rate of introduction of electric vehicles. It’s about how quickly [the Postal Service] can get the infrastructure up and running to recharge electric vehicles. But that will not delay this program.”

Secretary of Transportation Pete Buttigieg said last week he is unlikely to interfere in the contract award to Oshkosh.

In a final remark seemingly aimed at Workhorse without mentioning the company by name, Pfeifer said, “We’re moving forward. It’s full steam ahead. We’ve got the agreement. It’s signed, it’s executed. And we are moving forward with developing and getting ready for production.”

Buttigieg punts on ‘rethinking’ Postal Service truck contract

Oshkosh beats Workhorse for Postal Service delivery vehicle contract

Workhorse lawyers up in mail truck contract dispute with Postal Service

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for Trucks.com. He also spent two decades in domestic and international media relations and executive communications with General Motors.

8 Comments

  1. Fair? Oshkosh out spends Workhorse in lobbying for the NGDV. Oshkosh knows how the system works and will funnel a percentage back to the Republicans. USPS is NOT following best practices. Oshkosh stated they will not use Ford parts in building the NGDV but USPS thinks Oshkosh is using off the shelf parts. Oshkosh will deliver a product that was never tested by USPS and they Don’t have a EV solution. This award is full corporate corruption.

  2. “I emphasize that we won this program. It was a five-year process, and we won this fairly,” – the truck that was presented as the winner wasn’t even one of the prototype vehicles! The Oshkosh truck that “won” did not go through any of the USPS durability testing.

    By “We know how to compete for government programs”, he is actually saying “we know who to bribe to win government contracts”!!!

    1. The article mentioned, “IF” the Govt. wants to come up with the additional $$ for an all electric fleet. Does this mean you expect above and beyond your original contract Bid?
      Were you bidding Hybrids against Workhorse all electric trucks?

    2. Do you really know that the “Stock pictures” released have any relationship to the award? My guess is that you are making an assumption based on your views, not actual facts. Accusations of “Bribery”? Please Provide names and amounts if you have them, I would love to see anyone accepting or paying bribes arrested and prosecuted. Wait, you probably don’t have any actual proof of that either.

  3. Correction: The Postmaster General is NOT appointed by the President; it is the USPS Board of Governors who appoints him/her. The Governors are appointed by the President.

  4. How could a Turkish company make it to the top 3? They aren’t an American company, therefore they shouldn’t have even been considered. Also, why would the USPS even want those battery powered toys that waste an exorbitant amount of money instead of real vehicles with real engines that use fuel? Using the toy ones would be such a waste of tax payer funds.

    1. Trucks according to the RFP were required to be built in the US. The country of the company itself was not required to be US. My guess is they didn’t want to limit the design to US technology while protecting US workers for the build. I am surprised that a British company that builds right side drive vehicles as a norm didn’t try.

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