Tuesday Trends sample: Oshkosh Corp. rising, tax reform mixed and soybeans falling
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Oshkosh Corp.: Four years after the vehicle manufacturer -- and prominent Defense contractor -- lost out on a contract to produce Joint Light Tactical Vehicles, the U.S. Army and Marine Corps announces it's one of three finalists to replace the Humvee. Oshkosh, AM General and Lockheed Martin will each receive contracts to produce prototype vehicles for government testing next year. That deal is worth $56.4 million, but the full contract for some 25,000 vehicles would likely be worth at least $5.6 billion when it's awarded in 2014 or 2015. Company officials laud the decision and praise the performance of current Oshkosh vehicles in the field, but caution that "the big contract is going to be very, very political" -- particularly with the prospect of automatic defense cuts looming in a federal budget battle.
Tax reform: The governor has said before he wants to ease the stateís tax burden, and a string of recent comments rekindles speculation that it may be an agenda item in the next legislative session. Walker tells both the Milwaukee Rotary Club and this week's "UpFront with Mike Gousha" that he wants to lower state income taxes as part of his plan to pump up the stateís economy. Moreover, a report from state business consultant Tim Sullivan -- the former CEO of South Milwaukee manufacturer Bucyrus -- includes a surprising list of tax changes among its proposals to close the stateís jobs gap. In addition to recommending the streamlining of job training programs and other measures, Sullivan proposes increasing the sales tax to diminish the stateís reliance on the income and property taxes. He points to a study that suggests such a shift could create some 10,000 new jobs in Wisconsin and argues the stateís income and property taxes -- higher than most other states -- are a deterrent for high-income workers to come here. To some observers, the suggestion sounds familiar because itís been proposed in various ways over the years only to go nowhere. It's a particularly thorny issue with Republicans expected to control both houses of the Legislature after this fallís elections: insiders donít see statehouse Republicans embracing any kind of tax increase, even if itís one aimed at cutting another tax.
Soybeans: State agricultural observers had hoped for a decent year out of the soybean crop as farmers dealt with drought conditions. But those dry conditions have enabled an unusually large number of two-spot spider mites to wreak havoc on many soybean fields, and projections now show the soybean crop will be even worse than the state's drought-riddled corn crop. The Wisconsin office of the National Agriculture Statistics Service now projects the soybean harvest at 60.5 million bushels, a drop of 18 percent over last year. Yields are also projected to be down nearly 22 percent, with the latest estimates at 36 bushels per acre.