This Will Replace the Mighty Humvee

Written by John Peterson
Posted November 1, 2018 at 8:00PM

Dear Reader,

For those too young to remember, the public's first introduction to the now iconic high-mobility multipurpose wheeled vehicle (HMMWV), better known as the Humvee, came at the beginning of the first Gulf War back in 1991.

Its actual introduction came in 1984. Beforehand, the U.S. military's ubiquitous four-wheeled vehicle was still the legendary Jeep — the initial versions of which date all the way back to the 1940s.

In comparison to even the most modern version of the Jeep, the Vietnam-era 151, the Humvee was big, complicated, powerful, and intimidating.

It more than doubled the Jeep's curb weight from 2,400 pounds to between 5,200 lb. and 5,900 lb. And it almost tripled the Jeep's torque output from 128 foot-pounds to 380 ft.-lb.

This increase in size and weight allowed the Humvee to tow things like 105-millimeter howitzers and act as armored troop transports, cargo carriers, ambulances, along with the multitude of general tasks that the Jeep was famous for.

Of course, the Humvee's true fame didn't come from its military pedigree but instead from its civilian brethren.

In the mid-'90s, AM General, the designer of the military Humvee, began to market a civilian version of the beast: Hummer.

The giant, expensive SUV featured military-grade gadgets like push-button tire pressure regulation. But it also featured a military top speed of around 65 miles per hour. This was because of the torque-favoring diesel engines that AM General had chosen because of their towing capabilities.

It was the sort of thing that maybe should have died a quick and quiet commercial death, if not for one man who adopted it for his own transportation needs.

Arnold Schwarzenegger, then at the peak of his popularity and who would later become the 38th governor of California, gave the Hummer a priceless endorsement when he purchased no fewer than half a dozen of the beasts for his personal collection.

The popularity of the near-military spec H1 led GM to buy the brand from AM General in 1999. GM subsequently launched two more versions of the vehicle, each cheaper and more watered down than the last.

Meanwhile, the military continued to buy the HMMWV for its purposes, which were evolving rapidly as the U.S. continuous military presence in the post-9/11 Middle East faced new challenges from asymmetrical insurgent warfare.

HMMWVs, despite their size and potential for carrying heavier armor packages, proved unable to keep up with the demand for increased protection.

As the quagmire or insurgent management consumed more resources and produced more casualties, tactics involving improvised explosive devices (IEDs) and the ambushes began to account for the bulk of deadly attacks on American forces.

As these new threats became more and more routine, the military issued a call for a new vehicle as early as 2005. The parameters for the Humvee's replacement were set out in this statement:

In response to an operational need and an ageing fleet of light tactical wheeled vehicles, the joint services have developed a requirement for a new tactical wheeled vehicle platform that will provide increased force protection, survivability, and improved capacity over the current Up-Armoured High-Mobility Multipurpose Wheeled Vehicle (UAH) while balancing mobility and transportability requirements with total ownership costs.

The following year, the Joint Light Tactical Vehicle (JLTV) program was approved by the Pentagon. It kicked off a long-term study to further define needs and specific parameters for the end product.

It wasn't until August 2015 that the Oshkosh Corporation (NYSE: OSK) received approval for its offering: the Light Combat Tactical All-Terrain Vehicle (L-ATV).

The Humvee's successor, as you might expect, was bigger, meaner, more powerful, more capable, and far better protected than its predecessor.

The main variant of the JLTV, the Oshkosh L-ATV, weighed in at 14,000 lb., which was almost three times the weight of a standard Humvee. But it offered the same level of protection for its troops as the much bigger Mine Resistant Ambush Protected Light Vehicle (MRAP).

A number of versions will be available, depending on branch and intended application.

Below is a picture of the Humvee and the L-ATV sitting side by side:

The first JLTV delivery order was placed in March 2016. The U.S. Army ordered 657 units.

Total JLTV requirements are 5,500 vehicles for the Marine Corps entering service in full-year (FY) 2020 with all to be delivered in FY 2022 and 49,099 for the Army entering service in late 2019 with deliveries occurring through 2040.

At a price tag of between $250,000 and $400,000 per unit, based on model, the total contract value to Oshkosh over the two-plus-decade life span of the product line ranges between $13 billion and $20 billion.

That's not bad for a single product line from a company with a current market cap that barely breaks $4 billion.

The only question in my mind as I look through the pictures and videos of this 7-ton behemoth is one I that bet is on the minds of many...

Will we be seeing a civilian variant?

Sometime in the early 2020s, that question will be answered.

That's all for now.

Until next time,

John Peterson
Pro Trader Today

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