Who’s Wilson Jones, CEO of Oshkosh Corp Which the US Postal Service Bet Their Future On
He’s definitely not the Steve Jobs or Elon Musk the US Postal Service needs to survive.
Despite being in a growth industry, the United States Postal Service is in deep trouble. 2020 revenue was $73 billion with a net loss of an eye-popping $9 billion. Their business is rapidly changing. Shipping and Packages grew 25 percent while First-Class Mail declined 4 percent and Marketing Mail was down 15 percent. The US Postal Service needs bold, visionary leadership to save its sinking ship.
The postal delivery fleet is at the core of the value delivered by the US Postal Service. It’s how they deliver the mail. The current Grumman Long Life Vehicle (LLV) is an old design last produced in 1994 that many postal carriers think is horrible.
While the delivery market is rapidly changing, the US Postal Service spent six years coming up with a new delivery vehicle design. It will take two more years to get the first new vehicle in service, and ten more years at least to have them all deployed. That’s over a decade and a half when Amazon, UPS, and FedEx, not to mention email, are eating the US Postal Service’s lunch.
In a decade and a half, the US Postal Service should have reinvented itself around a 21st-century delivery fleet. A leading contender was the Workhorse W-15, an electric vehicle with an 80-mile range and a gasoline-powered range extender. By deploying a quarter of a million electric vehicles, the US Postal Service could have helped electric vehicle technology mature more rapidly. Amazon got that message and is out front in deploying an electric vehicle fleet.
Even more, the US Postal Service should be pioneering more novel forms of delivery, from autonomous land vehicles to autonomous drones. This is especially crucial in places where its personnel costs are high like rural areas. It’s expensive for a person to drive a mail truck down a long, sparsely populated country road. There are lots of regulatory issues with deploying autonomous vehicles on the land and in the air. The US Postal Service is an agency of the Federal government. Who is better positioned to make that happen?
Despite the existential threat the US Postal Service faces, a very conservative choice was made. The first phase of a multi-billion dollar, decade-long contract was awarded to Wisconsin defense contractor Oshkosh to build the Next Generation Delivery Vehicle (NGDV).
The NGDV isn’t electric but has a gas-powered, internal-combustion engine. Oshkosh promises that retrofitting NGDVs with battery power later on will be incredibly easy. Coming from a defense contractor, you have to chuckle at their bravado.
It’s hard to imagine how the US Postal Service thinks this “new” fleet will allow it to dig itself out of the hole that it is in. The biggest problem the US Postal Service has is not that its fleet is obsolete but that its service model is broken.
What kind of company is the Oshkosh Corporation, which the US Postal Service bet its future on? One of the best ways to understand the culture of a company is to look at its leadership. Entrepreneurial companies tend to reflect the personality of their founders, like Steve Jobs at Apple or Elon Musk at Tesla and SpaceX.
The Oshkosh Corporation isn’t a startup. The company was founded in 1917 and introduced one of the first four-wheel-drive systems. A defense contractor today, the company positions itself as “a leading innovator of mission-critical vehicles and essential equipment.” That’s not a market where lots of visionary risks are taken. In fiscal 2020, the company’s revenue was $7 billion and net income was $324 million. The company has more than 14,000 employees worldwide. It’s a huge, global operation.
Unlike entrepreneurial companies, leaders of a mature company typically are selected because they are in tune with the company’s culture. Wilson Jones was appointed Chief Executive Officer by the Board of Directors in January 2016.
Who is Wilson Jones? He is a company man who has broad experience across Oshkosh’s business segments. He joined Oshkosh in 2005 to lead the Airport Products business unit, was tapped in 2008 to lead the Fire & Emergency unit, and in 2010 was picked to lead the Access Equipment segment. In 2012, he became the company’s President and Chief Operating Officer. He’s a business guy, with a bachelor’s degree in business administration from the University of North Texas. The company announced that he’s retiring in April 2021, to be replaced by John Pfeifer who followed Jones as leader of the Access Equipment, Fire & Emergency, and Commercial segments.
Leaders like Wilson Jones and John Pfeifer thrive in operationally excellent cultures. The risks they are comfortable taking are data-driven, stage-gate-managed, incremental innovations demanded by their best customers. In their case, the primary customer is the government. With all the political consequences of decisions, the government is a very conservative customer. Jones and Pfeifer didn’t get where they are by getting too far out in front of their customer by taking bold, visionary risks. Incremental innovation is not what the US Postal Service needs to survive.
Steve Jobs was famously fired in 1985 as Apple CEO and replaced by John Scully who Jobs had hired. Scully was a big company manager selected by the Board of Directors to lead Apple into its data-driven, operationally excellent future. A decade later, the Internet was disrupting computing again and Apple lost $2 billion over two years creating an opening for Jobs to return as CEO.
While gone, Jobs enhanced his deep knowledge of personal computers with deep experience in music and entertainment. Jobs being Jobs, he uniquely envisioned a future no one else saw. He created an entirely new market by combining a portable media player with iTunes. Consumers bought single songs to create their own mix of music rather than being stuck with songs on albums chosen by record companies. Jobs elegantly positioned the iPod as “a thousand songs in your pocket.” Consumers loved it. The iPod led to the iPhone with the App Store. The rest is Apple legend.
Compare the brilliance of “a thousand songs in your pocket” to the mundane “Next Generation Delivery Vehicle (NGDV).”
Mobility is transforming globally. As if the pace of change wasn’t fast enough, the pandemic accelerated it. What the US Postal Service needs is a Steve Jobs who can combine innovations in technologies like electric vehicles, drones, and artificial intelligence into new transformative service models like the iPod.
Can a government agency do this? Not likely. They have made the safe bet to invest multiple billions of dollars into a fleet that from inception is hopelessly obsolete. Their die is cast. The US Postal Service will only survive through billions in taxpayer bailouts.
The raison d’etre of the US Postal Service is universal service. Their argument is that without them there are poor people or people in rural areas who would have no service. If as a society we decide universal service is essential, then the government should subsidize private contractors to provide service to poor or rural citizens.
The government should not dictate how that service is delivered. Amazon, UPS, and FedEx can figure out how to deliver the mail and packages much more cost-effectively than a government agency can.
What society really needs is for a Steve Jobs or Elon Musk to invent a new future for delivering the mail and packages in ways only visionary entrepreneurs in a market economy can.
