BAE takes loss after losing trucks contract

BAE systems will write down the value of its Armor Holdings unit almost $829 million after losing a contract to build armored trucks for the U.S. military, Bloomberg reports.

Armor Holdings had been building the trucks 17 years before losing out to Oshkosh Corp. in August. Both BAE and competitor Navistar had protested the decision, which was under review until Friday, when the Army announced it would stick with Oshkosh.

Here’s some background on the contract fight:

The Army, after a 60-day reevaluation, decided to go with Oshkosh
instead of the other two competitors, yielding a significant victory for
the Wisconsin-based specialty truck maker. Oshkosh also builds the
all-terrain mine resistant vehicles for the troops in Afghanistan and
also holds the contract for the military’s heavy tactical trucks.

“We
are very pleased the Army affirmed its original decision that Oshkosh
Corporation’s FMTV bid clearly represents the best overall value for the
Army, the taxpayers and the warfighter,” said Robert Bohn, Oshkosh
Corporation chairman and chief executive officer.

The Army’s
decision also deals a substantial blow to BAE Systems, which stands to
lay off about 3,000 employees at its Sealy, Texas, production facility
for the FMTV. Both BAE Systems and the Texas delegation fought hard to
keep the contract in BAE’s hands.

“I am highly disappointed by
the Army’s decision,” said Rep. Mike McCaul (R-Texas), who represents
Sealy. “It’s the wrong decision for Sealy, and the wrong decision for
the men and women who for 17 years have built the FMTV on time and on
budget and contributed to our military’s success on the battlefield.
It’s the wrong decision for our soldiers who depend on these vehicles.”