Germany Wins Army Truck Contract

A German-owned company is poised to win Britain's biggest order for military trucks for a quarter of a century in a move the Ministry of Defence says will create and support hundreds of jobs in the UK.

Man ERF, the UK arm of the Munich-based Man group, has been appointed preferred bidder on a £1.1bn contract to supply and support a fleet of 5,000 cargo and recovery vehicles that will be used to provide backing for frontline troops.

The deal also includes an option to buy some 2,000 more vehicles though no decision on the additional trucks is expected until 2005.

Man ERF is understood to have fought off competition from rivals including Mercedes-Benz, the US group Oshkosh and an Anglo-American consortium of Birmingham-based LDV and Stewart & Stevenson. The final contract is expected to be signed before the end of the year.

Lord Bach, the defence procurement minister, said the contract "will give our forces one of the most advanced support vehicle fleets in the world, creating hundreds of jobs across the country while ensuring the taxpayer gets the best possible value for money".

Just over half the work on the new fleet will go to factories in the UK from Man ERF facilities in Swindon and Middlewich in Cheshire and sub-contractors in Hampshire, Gloucester, Cambridge, the home counties, the West Midlands and Scotland. According to Man, much of the work on the chassis for the military vehicles will be carried out at the group's plant in Vienna with the bulk of the rest coming to the UK.

Man ERF employs some 3,000 people in the UK and chief executive Des Evans said that as well as sustaining the company's existing workforce the deal would create several hundred new jobs at Man ERF and its partners, particularly among young technicians looking to enter the truck industry. "As important as the trucks themselves will be the support element. That will have maximum impact on employment."

The Transport and General Workers Union said the good news for Man ERF had to be tempered with disappointment that the LDV consortium had been unsuccessful.

Tony Woodley, the union's general secretary, said: "It is a boost to our manufacturers and we're obviously pleased that a UK procurement means benefits for the UK economy."

LDV said while the failure to win the contract would not have an impact on the company's operations, if LDV and its US partner had won, the bulk of the work would have been in the UK.