Category: Transportation

FMTV Production Contract Award Protested

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Remember when I said that Oshkosh had won the FMTV military truck production competition, and so would be replacing BAE subsidiary Stewart and Stevenson?*

Well, BAE has filed a protest on the FMTV award, which means that there stop work order in effect.

Thankfully, production does not start for about year, so it should not have much of an effect, unless, of course, Oshkosh is using the time to redo the drawing package, which is likely.

*Full disclosure I worked at Stewart & Stevenson, Tactical Vehicle Systems, in Sealy, TX on the FMTV in 1992 and 1993.†
†Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.

Oshkosh Wins FMTV Contract

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It beat out BAE subsidiary Stewart and Stevenson* to win the contract for the FMTV Family of Medium Tactical Vehicles, a bunch of cab-over 4×4 2½ ton and 6×6 5 ton transport vehicles.

I am surprised that they beat out Stewart and Stevenson.

This is not because of any great knowledge of capability in S&S, but because in the various attempts to compete this deal, competitors have always been leery making of a bid because of the low quality of the drawing package…..Talk about screwing up in reverse.

I guess that the DoD finally got around to insisting that a proper drawing package be produced, and once there was a drawing package that allowed other manufacturers to compete, it was inevitable that the award would go to a company with actual experience in making trucks.

The background of the original contract award is a bit “colorful,” BTW.

*Full disclosure I worked at Stewart & Stevenson, Tactical Vehicle Systems, in Sealy, TX on the FMTV in 1992 and 1993.†
†Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.

Economics Update

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Last week, I mentioned that some of the declines in continuing unemployment claims might be the result of benefits exhaustion.

Well now we have the chart pr0n to show it, and I’m now wondering how many of the people dropping off the rolls are actually getting work.

Still, we are seeing some signs of improving business confidence, this time it’s German business confidence, which is up for the 3rd straight month.

I tend to prefer less ephemeral statistics though, such as commercial real estate prices (down 8.6% from April and down 25% year over year) and the fact that rail and truck traffic are still trending down.

We are also seeing some more signs of a reduced appetite for risk, with the dollar strengthening.

In energy, both crude oil and retail gasoline fell, largely on good inventories and concerns about a jobless “recovery”.

Note that this is the first time that gasoline has fallen in 54 days.

Why Mass Transit Sucks in the US

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Matthew Yglesias points to an interesting study on world subway systems.

It’s just a bunch of maps printed out at the same scale, and you notice a difference between the US and the rest of the world:

Take a look:

London


New York


Tokyo


Moscow


Paris


Chicago


Berlin


Washington, DC


Osaka


San Francisco’s BART


Boston


Philadelphia

There some outliers in the rest of the world, Seoul, for example, but the difference, except in New York, is that America does not really build subways, which serve the city and allow you to get around in the city, it builds some sort of light rail, for commuters to get into the city, in yet another subsidy of the American suburb.

Economics Update

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So, the US economy contracted at a revised 6.3% annual rate in the 4th quarter of 2008 and initial jobless claims rose to 652,000 from 640,000 last week, with continuing claims jumped to 5.56 million, another record.

Additionally, we saw New York City’s jobless rate jump by 1.2% in February, from 6.9% to 8.1%.

On the other hand, truck tonnage rose in February, which implies that the requirements for goods and services increased, and the 30 year fixed mortgage rates dropped again.

Meanwhile, in energy, retail gasoline broke $2/gal for the first time this year, and oil hit a 4 month high of $54.34/bbl.

In currency, the dollar rose today.

Have You Heard the Latest Polish Joke

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It appears that the Irish police have been looking for the worst driver in that nation.

One Prawo Jazdy has been ticketed all over the Emerald Isle, but they have been un able to track him down, because each time that he was stopped, his contact information was different.

So the Irish Garda has had capturing this scofflaw as a major priority for some time now.

Well, I’m sure that if any of my readers read Polish are now laughing hysterically, because Prawo Jazdy means “drivers license” in that language.

Move along here, nothing to see.

Economics Update

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Well, the jobless numbers are out, and they are not pretty with initial claims running at 588,000,continuing claims rising 159,000 to 4.776 million, which is the highest number recorded since the 1967, when they started collecting the data, and the 4 week moving average rose by 24,250 to 542,500.

Additionally durable goods orders fell by 3.7% in 2008.

And if you are wondering if there is a segment of the banking industry that won’t need a bailout, stop wondering.

There isn’t a segment of the banking industry that is not in trouble, as regulators are not moving to inject capital into credit unions, which are traditionally the most conservative, and the safest of the bank like institutions.

The fact that new home sales have fallen to the lowest level ever recorded (recording started in 1963) probably has a lot to do with this.

Also, freight truck tonnage is cliff diving. (H/T Calculated Risk)

Meanwhile, the most healthy of the Big 3 (Big 2½) auto makers, Ford, just reported a larger-than-expected $5.9 billion loss in the last quarter.

In international finance New Zealand is aggressively dropping its benchmark interest rates too, with their central bank 150 basis points (1½%) to the record low of 3.5%.

About the only good news is that it appears that deflationary expectations are easing, as the spread between 10 year Treasury Inflation Protected Securities (TIPS)and 10 year nominal securities has risen about 1% for the first time since November 10.

Meanwhile, the dollar was mixed today, and oil fell on the housing news.

Upgrading Freight Rail as Stimulus

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Phillip Longman makes the very good point that while people are talking up bullet trains, they are ignoring freight rail infrastructure.

I used to work as an engineer at GE Transportation Systems* on their locomotives, I was Lead Engineer on the Blower Cab Structure on the AC6000 Locomotive, and as a result, I consider myself to have some background in this industry.

Simply put, it is easier, cheaper, and faster to upgrade or repair existing for rail, and medium speed (say less than 150 km/h) rail than it is to construct new rail for what Atrios calls “Supertrains”.

Cargo transport is energy inefficient in the US, and the upgraded infrastructure would increase speeds, even for short haul passenger rail, and reduce accidents.

Best of all, this is all shovel ready, you don’t need an environmental impact statement, or to go before a planning board, or to seize land by eminent domain to repair and upgrade rail lines.

*Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.

Spend it on Rail

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John Judis at The New Republicmakes a good point*, that the stimulus package should be used to expand rail.

While there is an obvious argument to be made about how quickly one could get new high speed rail projects off the ground, the fact is that there is a lot of track maintenance and track upgrades that could be done very quickly.

Tracks for 200 mph trains take a while, but upgrading tracks to handle 100 mph passenger rail requires a lot less time.

Bullet trains would be nice, but more Acella lines would be a very good start.

*Yeah, I know, The New Republic and the phrase, “good point” don’t generally go together, but even a stopped clock is right twice a day.

The Final Word on Drinking Age

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Care of Atrios:

Perhaps they should consider my cunning plan to let 18 year olds have a drinking license or a driver’s license but not both, which would have the added benefit of helping my plot to make everyone move to Manhattan increasing the appeal of less car dependent locations.

(emphasis mine)

I’m Matthew Saroff, and I approve of this message.