Volume 9 | Issue 4 | Year 2006

It’s hard to imagine a more important line of work than the operations at Force Protection Inc., Ladson, S.C. The company’s 260-acre campus has become the nation’s leading center for blast technology as it designs, manufactures, tests, delivers, and supports blast- and mine-protected vehicles for deployment worldwide. Force Protection supplies advanced armored vehicles that protect against attacks from improvised explosive devices, land mines and roadside bombs as part of its ongoing commitment to support the safety of U.S. and Coalition armed forces.

The publicly traded (FRPT) company produces two series of armored vehicles, the Buffalo and Cougar, that have been used in Iraq. Thousands of suspected IEDs have been detected and removed by the equipment and troops have been transported safely over hundreds of thousands of miles of dangerous roads in support of Operations Enduring Freedom and Iraqi Freedom.

“The war in Iraq has brought to the forefront of America’s consciousness the deadly threat that improvised explosive devices (IEDs), roadside bombs and land mines pose to our servicemen and women. These lethal devices have become household names in describing the war on terror,” says CEO Gordon McGilton. “Force Protection’s proven solutions to counter these threats…the Buffalo route clearance and Cougar troop transport vehicle series have been tested thoroughly under the most demanding conditions. Because of the cutting-edge, blast- and ballistic-protection technology they incorporate, not a single fatality has been reported since the vehicles were first deployed in 2003.”

Force Protection has grown dramatically as a result. With a current workforce of over 500 and a backlog of vehicle contracts totaling more than $100 million in 2006, the company has made remarkable strides as it evolves from a small start-up organization to a state-of-the-art assembly line manufacturer.

“Realistically, the weapons being used in Iraq and Afghanistan will be faced by our troops around the world for decades to come. It is essential, therefore, that the life-saving technology we produce be available to U.S., Coalition, and domestic security forces in ever-increasing numbers,” McGilton adds. “Our commitment to constant improvement — both of our production processes and our protective technology — as well as our combined efforts with other leading manufacturers will expand production of these vehicles in the numbers and quality necessary to save lives today, and in the years ahead.”

Modern Military History
Formed in 1997, with its first headquarters at the Charleston Naval Yard, Force Protection later moved inland in November 2003 to its current strategic location near the Charleston Air Base. The company initially occupied the first 87,000 square feet of space in a plant that previously produced General Electric turbine engines. Force Protection’s dramatic growth has necessitated expansion of its production facilities to 340,000 square feet of administrative, manufacturing, research and development, test and integration space.

Previously under the name Technical Solutions Group, the manufacturing subsidiary realigned as Force Protection Industries Inc. in January 2005. The company had originally applied its protective design concepts to police boats but soon found the application for blast deflection technology was more critical for armored military vehicles.

“Post 9/11, the need for land vehicles became very evident to everybody,” says Michael Aldrich, vice president, sales and marketing. “Nobody makes a vehicle that’s as well protected against ballistic and blast attack as the Buffalo and the Cougar,” he notes.

Buffalo and Cougar are sound foundational designs, which are further equipped based on local needs. The Buffalo is a 23-ton route clearance and minefield clearance vehicle with different height and weight standoff from the blast, enabling it to be the best protected vehicle on the battlefield today, according to Aldrich. The Cougar is a 15- to 17-ton, more mobile version, in 4×4 or 6×6 format used for a variety of missions.

“The original combat engineer mission of clearing mine fields and routes of march against the IED threat has now expanded to other first responder needs such as a mine-protected ambulance, forward command and control vehicle, and general troop carriers,” Aldrich says. “We find that customers in the Marine Corps, because they’re on a shorter rotation, are redeploying major units for the third time into Operation Iraqi Freedom. And this time they’re not willing to go back in with the same up-armor solutions that haven’t worked in the past. They are asking for what they know is starting to work for their engineer units and applying it to all the ground infantry.”

The Cougar H series is a family of medium-sized, blast-protected vehicles that can be customized for multiple tasks such as troop transport, mine and EOD disposal, communications, command and control, reconnaissance, ambulance, and convoy. The Cougar 4×4 weighs up to 34,000 pounds with a payload of 6,000 pounds. The Cougar 6×6 can weigh over 38,000 pounds with a 12,000-pound payload.

The Buffalo mine clearance vehicle is used by the Army to detect and remove explosive threats such as IEDs, land mines, and roadside bombs. At up to 52,000 pounds with a payload of 24,000 pounds and optional sensor sub, Buffalo is also deployed for asset protection and urban weapons systems. Because approximately 10 percent of IEDs explode during inspection, the protection of the heavily armored Buffalo is credited with saving lives in the face of explosives at close range. “This vehicle is designed to take the punch….Buffalo now is a program of record in the Army and we expect Cougar to follow rapidly in both the Marine and Army equipment tables,” Aldrich says.

The vehicles have attracted media attention. CBS news anchor Bob Schieffer called the Buffalo “a humvee on steroids” and a “lifesaver” for soldiers tasked with detecting and removing explosive threats in Iraq. CBS reported that IEDs have become more sophisticated, triggered by cell phones or electronics with complicated frequencies, and that troops should stay back and let the Buffalo take the risk.

“Our vehicles are built with the specific purpose of protecting our troops and enabling them to remove the threat of IEDs and land mines,” adds Force Protection Vice President for Army Programs Damon Walsh. “They fill a critical need in the war, and we will continue to do everything necessary to ensure the availability of this life-saving equipment.”

Designed for Maintenance
An important aspect of Force Protection’s success is its integration of “off-the-shelf” automotive-style parts, accelerating production and, perhaps more important, ensuring ease of maintenance of this highly specialized equipment in the field of operation.

“In defense procurement, it’s said that logistics is the tail that wags the dog,” Aldrich relates. “So the sustainability and availability of parts globally is critical to our customer. By using world-class providers for all of the automotive and armored components of our vehicles, which take a pounding every day, we have been able to keep very high readiness rates and keep the cost down for the government.”

The ability to maintain equipment in combat often spells the difference between success and defeat in military operations. “The Department of Defense customer will not tolerate (equipment that can’t be maintained in the field). That issue is actually stopping people who come up to the door of the Pentagon and say they can make blast protected vehicles, too. The Pentagon takes one look at the design and sees they’re using all the wrong parts,” Aldrich says. “What made Force Protection’s approach so appealing was that we had power trains that were already in other vehicles so they didn’t have to go out and buy a whole new set of engines. We’re using the same axles that are in other vehicles already fielded. That kind of parts commonality is a huge factor in the ultimate buying decision. A lot of other (competitors in this market) spend time trying to survive the blast but they don’t realize that our vehicle can withstand a blast on Monday, and be repaired and back in operation on Friday. That’s part of the modularity of how we build the system and the availability of the parts.”

A related strategic imperative is Force Protection’s coordination with key partners and suppliers. “Another part of our expansion has been teaming with other defense manufacturers and niche players,” Aldrich says. One major supplier is Spartan Chassis, Charlotte, Mich., which makes custom, medium-to-heavy truck components used in fire trucks and emergency vehicles. “We’ve been able to use them to accelerate the automotive integration work,” Aldrich adds. “We were able to cut our manufacturing time, the time in which we integrate the cabin compartment, put wheels underneath, install electrical wiring harnesses, set up the seats, etc., from two weeks to four days. Obviously this also cut labor costs. Our principal purpose was to put worldwide, supportable automotive components underneath that would enable us to sustain vehicles globally much more efficiently,” Aldrich says. “The efficiency and automotive expertise that Spartan brought to our manufacturing effort has proven to be a gem of a strategy.”

Not a Business But a Cause
Clearly, the face of modern warfare has changed with the landmines, IEDs, roadside bombs, and rocket-propelled grenades as weapons of choice for terrorists and other enemy combatants. Troops face these threats around the clock with equipment that was never intended, nor designed, to withstand these weapons and their proliferation around the world. The critical and urgent need for vehicles with the strength to keep armed forces and security personnel safe is being met increasingly by Force Protection’s line of mission-configurable vehicles that are as mobile as they are blast resistant.

Force Protection is committed to provide vehicles that protect lives, while at the same time giving troops versatility in meeting mission objectives. Meeting this need is a national priority. As a result, Force Protection Inc. recently generated proceeds of $41 million in equity financing, closing on the private placement of 8.25 million shares of common stock.

“We are extremely pleased to make this announcement,” McGilton says. He noted that this round of financing would help the company expand its production capabilities to meet expected demand. “The working capital generated by this financing will allow us to maintain focus on delivering armored vehicle technology.”

The company continuously exceeds vehicle production objectives. For instance, it delivered 19 Cougar Joint Explosive Ordnance Disposal Rapid Response Vehicles (JERRV) and three Buffalo route clearance vehicles to the U.S. government in June 2006 alone. “We have done precisely what we committed to do,” says Vice President for Marine Corps Programs Wayne Phillips. “The completion of the JERRV contract took place as we told the Marines last year when our ramp-up efforts began. In addition, we are on track for the on-time completion of the current Buffalo contract with the Army, and will apply these same practices to the Cougar ILAV (Iraqi Light Armored Vehicle) program.”

The company has also expanded to non-U.S. contracts with the recent announcement that British Secretary of State for Defence has called for an initial $63 million procurement of Force Protection’s Cougar vehicle. In an address to Parliament in July 2006, Secretary Des Browne cited the Cougar armored vehicle as a necessary component for the country’s armed forces. “We judge that this vehicle meets our requirement for a well protected, wheeled patrol vehicle with a less intimidating profile than tracked vehicles. We are arranging to rapidly procure around 100 vehicles through U.S. military sources. We have received excellent co-operation from the U.S. government, military and industry, an example of the special relationship bringing real benefits for our soldiers on the ground.”

While Force Protection is expanding production quickly, details cannot be released. The company is projected to build several dozen vehicles per month. Parts growth is exponential as the company surpassed its 2005 repair parts and supply revenues by April 2006. At the same time, Force Protection continues to advance its ballistic protection technologies, adding preventive standoff and detection capabilities, as well as integrating advanced electronic counter measures.

“We talk a lot about survivability and we’re very proud of the fact that we’ve gone three years and 1,000 blasts without any fatalities, but we realize that could change tomorrow,” Aldrich acknowledges. “The threats are escalating, and that’s why we keep working on continual integration of new technologies. The best IED is one that never hits our vehicle in the first place so we are looking to integrate new technologies that will make a significant difference in how we take the global war on terror to the other side.”

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