How Oshkosh Defense cheats Wisconsin workers with decision to produce $6B USPS contract out-of-state

State residents cheered when the Wisconsin-based manufacturer Oshkosh Defense won a large contract to build a new generation of post office delivery vehicles, up to 165,000. But now Wisconsinites are fuming about the company’s decision to produce those vehicles in South Carolina, rather than Wisconsin.

Wisconsin’s political leaders and labor unions are stepping up pressure on Oshkosh Defense as well as the U.S. Postal Service and White House to get the company to do that manufacturing to Wisconsin. The 10-year contract, which could exceed $10bn, is expected to create more than 1,000 jobs. These leaders warn that unless the production is done in Wisconsin, Democratic candidates will be hurt in that pivotal swing state in this November’s elections as well as in 2024.

“We are extremely disappointed in Oshkosh Defense’s decision to accept the money from the US Postal Service and then turn around and send their production to a different state,” said Stephanie Bloomingdale, president of the Wisconsin State AFL-CIO union federation. “This is just another slap in the face to Wisconsin workers. People are very outraged about it. It doesn’t fit into president Biden’s vision to have high-road manufacturing.”

Many Oshkosh Defense workers have been wearing buttons to work, saying, “We Can Build This.” These workers, members of the United Auto Workers (UAW), said they were dismayed that the company, unionized since 1938, planned to do postal vehicle production in one of the nation’s most anti-union states. UAW Local 578 in Oshkosh has collected over 1,500 signatures urging the company to rescind its South Carolina decision, and Wisconsin’s unions are planning a big rally later in February to further pressure Oshkosh Defense.

“When we were notified the company won the contract, we were all excited – that’s another contract under our belt, more work for us to do,” said Thomas Bowman, a welder at Oshkosh Defense. “But when we were told it wasn’t being built here, we were all asking, why not? We know we can build it. We got the workers. We got the tooling. It can be done here.”

When the Postal Service first awarded the contract last February, it described the effort as a “historic investment” in next generation delivery vehicles that will replace many postal vehicles that are 20, even 30 years old. The new vehicles will be designed to carry more cargo and will have 360-degree cameras, air conditioning and a front and rear collision avoidance system.

The Postal Service noted that Oshkosh Defense was “evaluating which of their several US manufacturing locations” it would choose to produce the vehicles, and since all its existing plants were in Wisconsin, some people said there was a bait-and-switch when the company chose South Carolina.

In a statement, Wisconsin Senator Tammy Baldwin said, “Oshkosh Defense has a history of manufacturing trucks for government service in Wisconsin with skilled union labor, so I remain deeply concerned that they decided to manufacture the postal trucks in what appears to be a newly acquired facility with inexperienced, likely non-union hires, in South Carolina.”

Baldwin said she would continue urging Oshkosh Defense and the Postal Service to do further scrutiny of the production site in South Carolina. She emphasized how important it was economically that the postal trucks be made in Wisconsin.

On February 1, the UAW’s president Ray Curry, issued a statement that said the production of the new postal vehicle was “an opportunity for the Biden administration to make real investments in both a cleaner future and good union jobs, but the contract, as it currently stands, fails on both accounts.”

Curry urged the administration to have the Environmental Protection Agency review the postal service’s contract because the union asserts the project will have “adverse environmental” and socioeconomic impacts that it says the postal service failed to examine in its Environmental Impact Statement.

The post office said its impact statement was done in full accordance with federal environmental law after having reviewed all comments submitted.

When Oshkosh Defense announced plans to produce the vehicles in South Carolina, it chose to use a large, empty, former Rite Aid warehouse in Spartanburg. The company said it was eager to have a “turnkey” plant where it could quickly begin production to help meet its goal of delivering the first vehicles in 2023.

At the time, John Bryant, president of Oshkosh Defense, said Spartanburg “has a skilled workforce and a proven history in advanced automotive manufacturing.” BMW has its only U.S. assembly plant there.

“We evaluated sites in multiple states, including Wisconsin, for production of the [Next Generation Delivery Vehicle],” said Bryant. “The Spartanburg, South Carolina, facility ranked highest in meeting the requirements of the NGDV program and gives us the best ability to meet the needs of the USPS.”

Bryant noted that the company plans to establish a postal vehicle technical center in Oshkosh that will employ more than 100 people.

When the Postal Service was asked about Wisconsin leaders’ demand to move production to Wisconsin, it said, “We remain committed to modernizing our delivery fleet in service to our customers. The NGDVs will be manufactured in the United States, which is consistent with the terms of the Postal Service’s contract with Oshkosh Defense.”

In October, the White House announced that in one of the administration’s first, big green projects, the infrastructure package would give the Postal Service $6bn so that 70% of its new delivery fleet would work on battery-electric power.

But Cindy Estrada, a UAW vice-president said, “We’re saying Build Back Better, but you’re getting it wrong right out of the gate. These are public dollars where we could have more control over making sure this goes to good, union jobs.

“This is not good for the Democrats. Working people are hearing one thing about Building Back Better and seeing the results the other way,” Estrada added. “This is an opportunity. A mistake was made. This is not Build Back Batter. This is building back worse.”

Biden administration officials say they have no ability to alter the Oshkosh Defense contract, noting that it was awarded by the Postal Service, an independent agency that the White House does not control. They say their hands are, in essence, tied.

Asked about the Oshkosh Defense controversy, a White House official responded, “As the President has said, this is the most pro-union administration in history. President Biden is focused on creating good union jobs across the country and believes firmly that every worker in every state must have a free and fair choice to join a union.”

In November, AFL-CIO President Liz Shuler and 30 union presidents wrote to President Biden saying the Oshkosh Defense contract “missed an opportunity” to “ensure high-road, union manufacturing.”

They concluded by asking him to “support our call” to have the Postal Service make sure the contract “supports and protects Oshkosh Defense’s existing, union workforce. In this way, the administration can join us in opposing Oshkosh’s use of a USPS contract to facilitate union evasion and a race to the bottom in wages, benefits and working conditions.”