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>> greg fredericksen: someof you probably know this. if we don't have alot to talk about, you can load a bunchof slides in there. so, so it takes a little longer. i appreciate youhaving me here today. also interesting as my,my presentation's loading, i actually worked for generalmotors for about 22 years. in the late 90's,i was the director for truck procurementin, in, in [inaudible].

and so i was actually thecustomer to american axle, and, and i, i got to tell you, ifyou ever want to see a company with a, a passionfor manufacturing, go visit that company. truly everything that alan saysis true about that company. i can remember meeting richarddalkin and the entire team, and in five years,i was responsible after about fiveyears after they took over the responsibility from thefive general motors facilities.

the equipment thatthey put in there, the amount of quality[inaudible] that the providedwas outstanding. matter of fact, i was tellingalan cdk2 was mr. dalkin's theme, and a lot of people saidthat's very costly dividing equipment and itis, but the cost of quality is sometimesnot measured correctly. so my hands off tothat organization. they've done an outstanding job.

i really appreciate theopportunity for being able to talk to you briefly beforethe students get to see who wins the, the grand prize. i want to talk a littlebit today about who we are at osh, oshkosh corporation. we're broke, broken downinto four business segments. in case you were thinkingi was going to talk about baby clothes,that's a different company. [laughter] we're actuallya severe duty manufacturer

of equipment and, and vehicles. i also briefly will goover our gross strategies for the next few years, and theni'll briefly share with you one of our segments that are goingglobal and what that means to our global procurementand supply chain team. so let's take a lookat our company here. at oshkosh, our mission isto partner with customers and to deliver superiorsolutions that safely and efficiently moveour people and materials

around the globe andaround the cloud. what you will see is i'veexplained to your our company to you is that we are a premierspecialty vehicle manufacturer. you also see that our productsare critical in supporting or protecting our customers andsafely executing their jobs. as i stated, our productssafely and effectively, they cost efficientlymove people and materials they safely move ourprecious men and women across difficultterrains in afghanistan.

build roads and buildings. they rescue us in crisis, andthey even remove our waste when we're done with that. we're broken into four segments, as i talked to youabout, just a minute ago. briefly, there area defense segment, which is primarily focusedon tactical wheeled vehicles for our military customers. our access group is responsiblefor area work platforms,

scissor lifts, materialhandlers, and vehicle recovery trucks. our pierce, or our fire andemergency organization is where we build our, ourfire trucks under the name of pierce brand, whichis the number-one leader in fire trucks inthe united states. we also ship products abroad. we also service our airportswith fire and rescue trucks, snow removal trucks,

communication satellites,and ambulances. and then finally, in our commercial groupis our mcneill's brand where we have a number of different productsincluding cement mixers and refuse vehicles. so our portfolio ofbusiness provides very wide diversification while italso serves as a platform for sharing technology,

purchasing power aswell as customers. we are manufacturers, specialtyvehicles and vehicle bodies as well as access equipment. our products carry areputation for best in class in engineering, advancedtechnologies, and quality. as stated, we have thefour business segments. part of our strategies havediversification of a wide, high-quality brand of products. i'd like to briefly reviewwith you the financials

of each area starting offwith our defense segment, which leads this year with overseven billion dollars in sales, in part due to our largeurgent need requirement of matv vehicles for ourtroops in afghanistan. secondly is our access group, which is coming off thegreat recession with revenues of about 1.3 billion dollars. this is about 55 percentoff our peak levels of this business segment, justseeing a few years ago in 2008.

fire emergency is abouta million dollar business to us globally, andthen over at commercial, we see another very tough year. it was a 600 milliondollar plus year. again, we're waiting for therecession to come to an end in many areas such asthe housing industry which this segmentserves the most. some of our businesses arecyc, cyclical as you can see, and the sales and earnings

by each segment varyfrom year to year. for example, our constructionrelated business has experienced significant lower salesover the past five years. our defense segment is becominga much bigger percentage of our overall consolidatedbusinesses over the past year due to ourmatv product, and we continue to work here to develop,support our troops. the diversificationof the family of businesses helps usoffset some of the impacts

and the downturns, and for us,it really helps us in keeping and maintaining ahealthy supply chain. we are, we are the global leaderin niche specialty vehicles and vehicle body, bodies for themarkets in which we compete in, and we are workingto stay the leader, and our supply chain playsa major role in this area. we are increasing our share of many businesses duringthe down period as well. so what i'd like to dobriefly is talk a bit

about our growth opportunities and how our global supplychain fits into that. first off, let's look atwhat we see is the near term growth drivers. the great recession's put aparking brake for many of us in the non-defensearea of many markets. two years later,what we see is users of our products aresitting on aged fleets that need replacing whileoverall business climate is

slowly, slowly startingto improve. so first, market recovery alone in our non-defense businesswill provide substantial growth opportunities for oshkosh,but we don't settle for just growth opportunitiesin a market [inaudible]. we believe that striving togain market share and gain into new marketsjust [inaudible] from the last 15 years, andthat requires a very agile and competitive supply chain.

second is why we believe that emerging markets willbe a big growth opportunity, and we're committed to beingthe leader in these markets, especially in the brickcountries of brazil, russia, india, and china countries where they are business buildinginfrastructure in new cities. we have market entry strategiesfor each of these countries, and these strategies include howour supply chain will support us in each area.

and last, we're notjust looking externally. we've put huge amounts of energyand initiatives into placing into our global operations and improving our efficiencywhile it also includes restructuring of many ofour facilities as well as our suppliers in, inall areas of the world. the potential fortaking advantage of this at this time is great. we have five plans, five focusareas for the fiscal year 2011

to steer our company and tocapitalize our growth drivers to position oshkosh intoresuming our track record of superior growthin 2012 and beyond, and i'd like to take a look atone of those business segments, our, our access group. our access group, gogis the brand name, is the global leader,leader is scissor lifts, area works platforms, telehandlers, andboom equipment.

if i take a coal from the[inaudible] material regarding this conference, i think youcan see that this fits well with the access market. the quota is as the worldeconomy becomes increasingly intertwined, newopportunities are rising in previously unexploredmarkets, regions, and industries. this is a picture of somebamboo scaffolding in, in china. while most western countrieshave embraced access equipment

to safely and efficiently movetheir people and materials, there are still many countriesthat have a long way to go. it's an opportunity like this[inaudible] win-win opportunity between our organizationand our customers as well as our supply chain. by the way, supply chain isa pretty tough sport for most of you that are thinkingabout a career there. we actually have our new supplychain members climb those bamboo scaffolding to see ifthey have the right stuff

and to come work for us. [laughter] [inaudible]companies that move fast in these global marketshave the agile, the ability to provide theircustomers with solutions that address the needsof their business as well as provide betterand safer technology. in doing so, especiallyin emerging markets, the unleashing potentialfor companies to improve their overallperformance is huge.

but for companies tosucceed, they need a strong and qualified, aqualified supply chain that can support therequirements around the globe. if you're going togo, if you're going to be competing globally,you must be global. in many cases, you will want tohave your global supply chain in place prior to entering thesemarkets, or be a fast follower. otherwise, you will just notreceive all of the best benefits of being in that region,and i'm not just talking

about competing at cost. i'm talking about if youcompete in all [inaudible] of supply chain management. but if you speak of cost, having a global supplychain will allow you to always understand how you'redoing in your home markets from a total cost standpoint. this allows you to beable to counter measures, working with your currentsuppliers as required to ensure

that they're alwaysin a position to win in every region inwhich you compete. here, you can see a couple ofpictures of our gog products in china, including one of our gog boom machinesoperated just outside of [inaudible] in preparationfor the 2008 olympics that were held in china. so now what i'd liketo do is look at briefly discuss a fewbarriers that companies face

when they go to work on aglobal supply chain as well as provide you some thoughtstarters on how to address them. this is, by no means, anexhaustive list, and i'm sure that other panelists and folksin the room here have more ideas to offer in this area. the first area i'd like youto consider is the people that you have to run the play. buyers, engineers, andproduct supplier development, supplier quality, marketing, andother functions play a key role.

managing a global supplychain and unleashing for potential istruly a team sport. if you don't haveeverybody on the same page, you'll just be another[inaudible] to the company that will realize somebenefits but will never excel to achieve the maximumthat can occur. so purchasing and supply chainteam members need to spend a lot of time on communicating,explaining, and connecting the dotsto get everybody aligned.

in this picture, you see one of the many key stakeholdersmeetings that we've held in china and in north americain preparation for our new plant that we were building thispast year to make sure that people reallyunderstood what the play was. and then you have culturaland geographic issues to face, and don't take these lightly. you've already heard aboutculture from julie, from alan, and now i'm talking about it.

so i guess, i guess itmust be pretty important. unless you've lived on bothsides of the fence here, you will not really, reallyunderstand the impacts that these issues can bring. meeting schedules, early in themorning or late in the evening, and you have them every week. holiday schedules that wereignored or people took holidays and didn't tell you about it,and now you have no support. language issues, especially,unfortunately, in this country,

and alan brought this up, cannotbe, cannot be underestimated. i hate to draw ageneral statement here on the language issue,but especially for american companies,it's taken much, much too much for granted. and how do you manage allthis is, is really the key. i mean, do you manage it aswho will win and who will lose, or do you try to make itwhole balanced on each side, especially when you dealwith the global suppliers.

because, quite frankly,many companies will go out, and they will treat suppliersunlike they treat themselves. and in the end, thesuppliers will be the ones that will help supportyou in your endeavors. so you need to really have abalance between high entry, your suppliers around the world,and remember the golden rule. as you focus on productsthat you will need to buy, you will come across the specsheet, especially if you're in a manufacturing environment.

this sometimes can be called asthe non [inaudible] syndrome, or we've always doneit this way. you hear a lot of themare underlying trends within your organization. by, in some cases, you can buythe exact spec the same way you buy today and have littleor no impact on quality, on costs, or on the product. many times, this direction willfocus the local supply base, which drive up costsactually, as you'll force them

to use designs or specificationsor materials that are difficult for them to procure intheir local environment. this doesn't mean thatyou should sell for less, but you should consider thesuppliers and provide them with your functionalrequirements. in other words, ask them whatdoes the part need to do, how long do the parts needto last in the environment, and what performancerequirements do these parts need to meet?

often, suppliers are able to meet your performancerequirements with their regionalmaterials and technologies if you give them a chance. remember the comment i madethat this is a team sport? you can see why it'sso important to have the engineeringinvolved and aligned up front. this is a picture ofour new access plant in [inaudible], china.

building a launch anda plant while going through a global great recessionwas a challenge for any company, including us, but it's alsoa huge, a huge motivator for our company and forour employees to be part of a global projectand see the benefits of being a global company. it also helps in getting supportonce you're building a global plant and buildinga global company with your global supplychain to help run the play,

to be able to tap intobenefits of what they conceive from the local supply chainfor that plant as well as benchmarking that plantagainst your other operations. people get excited aboutworking on something new, and they get excited abouta company that is growing. global procurement inthe supply chain offers, often this is a team thatleads in these areas. one of the best benefitsof being purchasing, being a supply chain is theopportunity to travel, to learn,

to network with otherpeople around the world and with all functions. and the technology and thecreativeness that you will see from the supply base aroundthe world is truly amazing. global competition andthe drive to win provides so much innovation, there'sjust no way, there's no way that one company can'tdevelop this all themselves. this is the power thatpurchasing a supply team of professionals around theworld can offer their companies.

as we get new challengesfrom our engineers, our manufacturing teams, ourfinance quotes on budgets and things to meet, we havethe world at our doorstep to solve these challenges. we need to open thedoor and take advantage of these opportunitiesbefore others take advantage to them in front of us. again, here, you seea picture from some of our supplier workshopsthat we performed in china.

face-to-face meetings andcommunications with suppliers and engineers are criticalin gaining the understanding of acceptance of alternatives, especially if you're amanufacturing company. sharing success storiesis another best way to get your organizationbehind a global supply chain initiative. the results are usually muchsuperior to anything you can, thought you could achieve atthe beginning of the project.

and as you know,success breeds success. everyone loves to beon a winning team. we localized 90 percent, 90 percent of our firstscissor lifts and boom activity in [inaudible], chinain six months. now that's a real success story when the team's originalplan was three years. here, you can see a picture ofour operation supply chain team in [inaudible], china

after successfully launchingour planned contingent this past may. and don't think there isn'tjust a little bit of competition in the quality of theperformance that they make, the products that they putout, and the performance between them andour other plants. it may not be quite as adversaryas the green bay packers and the chicago bears, butcompetition pushes all of us to be a much better company.

so i hope that i have helpedprovide some degree of insight about the topic ofunleashing global supply chain, and i look forward to takingquestions on this subject. thank you. [ applause ] [ background noise ] >> greg fredericksen: go ahead. >> so [inaudible], alan talkeda lot about just the difficulty of supplier development.

i also worked at gm duringthe time that you were there, and they'll have difficulties,especially going overseas. could you talk some more aboutwhat [inaudible] in china because i'm really impressed with the six-monthimplementation to get to, to the 90 localization. [ pause ] >> greg fredericksen: ok. great question.

well, the first thing that wedid on the [inaudible] with alan and some of the other companiesdo, we put a purchasing office in shanghai actually threeyears ago [inaudible]. all of our shanghai teammembers, we have 16 there, are all degreed engineers. they're actuallysuppliers off [inaudible] and supplier development[inaudible]. so three years ago, weput that office in place. we started sourcing products forexport [inaudible] into europe

and into north america. that really helped us understandthe, the supply chain. the other thing that we did,we're an niche vehicle company. we're not a high-volumeautomotive producer like, like alan's team. so we were able to, sometimesyou can go and get, you, you don't have to get the,the, the, the best, you know, the lowest cost types of supply. we're not in that type ofhyper-competitive industry.

so we went for a supply basethat was maybe not the lowest in cost, but they already had anestablished quality procedures. we were able to affordthat in our industry. so we were ready tolaunch our plant then. two years later, we alreadyhad very seasoned supplier development of ourquality engineers. we started to havea warm supply base, and then we justturned on the heat. >> any other questions?

>> richard, i hada question for you. and, and, you know, icouldn't help, you know, think that i puton the [inaudible]. you had a call on masculinity, and [inaudible] wasconsidered feminine, and russians werelow on that scale. i would never put a russianlow on that masculinity scale. what was that? >> richard: [background talk]the, the masculinity scale has

to do with how, femalesare similar, it's the, the male populationhas a variance. so you have low masculinitymeans how competitive are males amongst each other, to whatextent do they [inaudible]. so americans are very, you know,rah, rah, rah, play football, go punch each otherand [inaudible]. russians are more on thatside of what's [inaudible]. but it doesn't, it doesn'tmean, don't, don't get it wrong. [inaudible] put togetherwhat the, the collective,

it's more of a familyenvironment. so in russia, for example,if you have an employee, if you're in st. petersburg[inaudible] operation, and u.s. employees who moved tomoscow, i'd say the likelihood of them moving lowering than ifyou had an employee in chicago and the rest of them hadmoved to cincinnati, and, and the reason why ispartly because the family is so important to them,number one. number two, they don't havethe same social background,

government social background. their social networkare their friends. so, and, and families. so if something goes wrong,they need that network, and that connects to moreof this more feminine side. don't, don't get me wrong. it's not that they'rewhipped [laughs] by any stretch ofthe imagination. >> and, and, and aquick question for greg.

one of the things i saw was yousaw the defense segment grow from 2.5 billion to 7.1billion from 09 to 10. what lead time did you haveto execute this contract, and how did you actuallydo it all in one year? >> greg fredericksen: well,the answer is we had none. this was actually, it's, it'sa great, we're very proud of this, this story here. it was a, two yearsago christmas. the, the government came outwith an urgent need requirement

because of the, the [inaudible]wrap vehicles that they had to protect our troops weredesigned for, were not designed for off-road [inaudible]. so they put out somethingjust before christmas is all, and [inaudible] rightbefore christmas. they, they put outtheir [inaudible], and they go on vacation. and so we workedover christmas, and, and actually we developedthe vehicle,

had three vehiclesready for february. it was a very intensecompetition with five other manufacturers. we, we were down selectedin may to number three, and, and right beforethe fourth of july, remember there's a holiday, we,we were awarded the contract, and we launched in july, andit was around 50 vehicles. we went up to a thousandof them by november. it was the secretarygates, the secretary

of defense robert gatescame to our plant, and he said it was thefastest launch between military and industry since world war ii. and we're very, veryproud of that. our supply chain, we have 30, 70 percent of the vehiclesactually purchased. so you can imagine we have a lotof buyers and engineers around, around the clock for avery long period of time. for five months straight, ihad a hundred engineers living

with suppliers for fivemonths helping them with [inaudible]change schedule. very collaborative. this was a very collaborativeproject with, with suppliers and engineering, and it's one ofthose things where you just have to be real talentedwith communication. so there's probably alesson learned in there, a couple of bookswe should write. now we have a little sleep timeon it, but it was, i mean, we,

we had an order, it was 8,000vehicles in one year, and, and very, very proud of that. we, we outperformed over to whatthe u.s. government take the vehicles [inaudible]. they actually hadan [inaudible], actually using russian,big russian planes and large [inaudible]in the world that were actually airliftingthese vehicles to afghanistan until they got tosee the [inaudible].

that itself probablyeven [inaudible] talk to you about as well. but, it, it, [inaudible]lean forward on the suppliers [inaudible]and then you don't. so you're going to windup on a lean forwarding [inaudible] contract. and this was, this was a casewhere it was in a [inaudible]. so, you know, likemany companies, our stock pricing dropped from$40 to five bucks a share.

you know, we were scrambling to,for every dime we could have, and then we had to lean forwardfor about 40 million dollars of [inaudible] materialsto suppliers, and we didn't have a contract. and so takes a littlebit of guts from your, from your managementteam to have trust in, in your design andin our suppliers. [inaudible] >> this is kind of a, abroad question, but as,

as you develop suppliersglobally, how do you [inaudible] allthe resources [inaudible] competitive edge? >> well, i wouldneed an [inaudible] property [inaudible]. any, any manufacturing company,and so there's a balance there. first off, there's, there's[inaudible] that you have as [inaudible] the supplierin this, and, of course, the suppliers [inaudible]are free to,

to put with whoever they want,but we do work [inaudible], we're a very largetechnology driven company. so we do work with suppliers,and they'll bring technology to us, and we'll, we'll getexclusive ingrains with them for maybe a year or two. we are, for example, in ourrefuse business, we're the only, only [inaudible] that makescng, compressed natural gas, vehicles within our plants. others have to go throughparties and, and do that.

and we have several [inaudible]agreements with some, some of the cng suppliersbecause we're helping them get into industry, too, right. so it's sort of a win-win. we demonstrate their products. they allow us [inaudible],over time, of course, and they will go to ourcompetition and, and hopefully, you know, we're just, youjust got to keep moving on that continuousimprovement path.

so you're iterating tests withyour competition, and there, there's a [inaudible]about competition is the, the innovation and creativity because you knowyou're competing. you just have to run fast. but, you know, [inaudible], there is a [inaudible]of suppliers. you want your suppliersto be diversified. you don't want them to berepresenting your business.

i think the, the americanaxle story is, is outstanding. they needed to diversifyaway from general motors to be healthy, and youlook at the road they went down to do that, and generalmotors actually encouraged them to do that because you justdon't want, you know, as, as one company gets sick[inaudible] your supply base, base get sick, you'rein real deep trouble. so it's a balance, but thebest thing is to run fast and have very talentedengineers,

and, and then it's fine. >> to keep us back on schedule,probably talk at this point. we'll have our speakers -