A local manufacturer is gunning for a defense contract it says would result in up to 400 jobs over the next decade in East Chicago.
Industrial forklift maker Hoist Liftruck is hoping to ride a wave of Buy American sentiment into a lucrative contract to make container handlers that U.S. military forces could use on rough terrain. It hopes to win a federal contract currently held by a Swedish company whose patents expire next year, Hoist Liftruck President Vince Flaska said.
President Donald Trump just announced details of a Buy American and Hire American policy at a stop in Kenosha last week. He spent a lot of time on the campaign trail pledging that American companies and workers should come first, such as with federal government contracting.
Flaska said Kalmar, a subsidiary of the Finnish company Cargotec, has had defense contracts valued at more than $1 billion to supply the Department of Defense with Rough Terrain Cargo Handlers, the heavy-duty equipment that can move storage containers on sand and other unstable surfaces, since 2000. The military refers to them by the acronym RTCH.
“Many of the Army bases that these trucks went to don’t need a RTCH, and don’t use them,” Flaska said. “A lot of these trucks just sit there and have been a waste of taxpayers' money, and is military funding that could have gone to better use.”
Kalmar dismissed Hoist Liftruck’s accusations, but declined to comment on specifics, citing company policy.
“At Kalmar, our company policy is not to comment on any information regarding ongoing business opportunities, our customers or competitors as they speak for themselves,” said Maija Eklof, vice president of marketing and communications for Kalmar. “There is no truth behind these arguments.”
Hoist hopes to expand defense contracts
Flaska said Hoist Liftruck has supplied military posts such as Fort Knox, Fort Stewart and Camp Atterbury with its own lift trucks that can move containers from an asphalt base, but has not been able to procure the more lucrative contract for the rough-terrain lifts. It tried unsuccessfully in 2013 to sell its own all-terrain reach stackers to the federal government, though Flaska believes his company can supply the military at a lower cost to taxpayers.
“By our estimates, on the number of RTCHs we have seen in the secondary market, and incorrect product selection based on application, there is easily well over $100 million wasted and likely more,” Flaska said.
The company recently relocated manufacturing operations from Bedford Park, Illinois, to the 110-year-old former Blaw Knox tank factory in East Chicago, where it’s investing $40 million and aims to employ 500 over the next few years.
Hoist Liftruck has set aside some land on the site and would build a second factory if it were to secure the Department of Defense contract. Flaska estimates the company would have to hire 120 to 150 people within the first year or two, and ramp up to 300 to 400 employees working only on the military manufacturing over the next decade. The company has a private-label deal with Toyota, which is the world's No. 1 forklift manufacturer.
“This will be a huge win for an area that desperately needs job and economic growth,” he said.
“We have already developed a RTCH truck, we have better worldwide distribution and support, and most importantly we are going to bring jobs to the United States and Indiana that are overseas.”
Kalmar operates a manufacturing plant in Texas, but Flaska said he believes the company actually manufactures the Rough Terrain Container Handlers in Sweden and may just assemble them in the United States, based on his review of federal documents and an interview with an ex-Kalmar employee. Kalmar contests that assertion, but Flaska said the greater principle of the federal government doing business with an American company also is at stake.
Focusing on positives, pro-American mood
“Hoist is a wholly owned U.S. company; we reinvest our money into our company providing for economic growth and job growth in Northwest Indiana and the United States,” he said.
“The money the military is spending with Kalmar is producing a reduced economic impact, since the money is going overseas. Hoist manufactures 100 percent in our East Chicago facility, and we only source to U.S. companies. One-hundred percent of our truck is made and sourced in the U.S.”
Flaska said he reached out to the offices of U.S. Rep. Pete Visclosky, D-Merrillville, and Democratic Sen. Joe Donnelly, for help.
Visclosky’s office initiated an inquiry with the U.S. Army to ensure it was aware of Hoist Liftruck’s domestic manufacturing capabilities, spokesman Kevin Spicer said.
“It is common sense that American taxpayer dollars should be used to support American workers,” Visclosky said.
“It is imperative that we use strong Buy America requirements, particularly in areas of national security, so that we preserve and expand the ingenuity and knowledge of our manufacturing base. I applaud Hoist Liftruck for their initiative to invest in our Region and seek further opportunities to create more manufacturing jobs for the skilled Northwest Indiana workforce.”
Donnelly Press Secretary Michael Campbell said his office cannot help individual companies land federal contracts, but can notify them of opportunities and see if they’re operating on a level playing field.
“Donnelly believes that American companies, employing American workers, should receive federal contracts when other factors are equal,” he said.