DALLAS — Arkansas Gov. Asa Hutchinson said he intends to call a special session of the Arkansas Legislature to consider bonds for a Lockheed-Martin assembly plant that could build a next-generation vehicle for the Army and Marines.
An official call for the special session set for May 26th will go out later this month.
Lockheed-Martin proposes to build the Joint Light Tactical Vehicle, a replacement for the current Humvee, at its Camden Operations site in southern Arkansas.
"Our Camden facility is ready for production," said Scott Greene, vice president of ground vehicles at Lockheed Martin Missiles and Fire Control. "To fully prove that point, we assembled a JLTV on our Camden production line . . . proving conclusively that the line and facility are ready for vehicle assembly right now."
Issuance of the bonds would be contingent on Lockheed Martin winning the bid for the Army project in competition with AM General and Oshkosh Defense. The three contractors have each submitted 22 prototypes for testing. The Army expects to name a winner by Oct. 1.
The government contract could be worth $25 billion to the winning bidder, and possibly more with sales to foreign governments.
Hutchinson did not say how large of a bond issue was needed, but Amendment 82 allows bonds up to 5% of state general revenues. Debt service for the bonds can come from general revenues or a dedicated stream.
The project, whose value has been estimated at $1 billion, could create, over time, almost 600 jobs while securing more than 1,100 jobs for the life of the project, officials said.
"If approved by the legislature, this project would not only create hundreds of jobs, but it would also put Arkansas on the map in terms of vehicle assembly and the potential for a major defense contract," Hutchinson said in a prepared statement. "Of course, any obligation to the state will be conditioned upon an actual award from the United States Army."
Passed by voters in 2004, Amendment 82 allows the state to issue bonds to finance infrastructure and other needs to attract major projects to the state of Arkansas.
The amendment was passed after Arkansas learned that it had come a close second to San Antonio in bidding for a $750 million Toyota Truck assembly plant.
Amendment 82 originally stipulated that the state could only issue general obligation bonds to attract projects that returned a $500 million investment and created at least 500 jobs.
In 2010 voters approved changes to the amendment that removed the thresholds for awarding bonds, allowing them to be used for smaller projects. Amendment 82 had never been used and many thought the financial incentives in the measure were too tough to entice major projects.
Arkansas' first use of the Amendment 82 bonds came in 2013 when the state approved $125 million to help finance construction of a $1 billion Big River Steel plant designed to employ more than 500 people with an average compensation of $75,000 per year.
Amendment 82 bonds can be used for land purchases, site preparation, road improvements, rail spur construction, water service, wastewater treatment, employee training, environmental mitigation and construction of related training and research facilities, among other purposes.
Lockheed Martin's Camden, Ark., facility handles production of several major missile and artillery systems for the U.S. Army and allied armies at the site that has 479 employees. The highly automated facility began production in the early 1980s.
The Army's request for proposals outlines an award period covering three years of low initial production and five years of full-rate production, procuring about 17,000 vehicles for the Army and Marine Corps.
"Based on the anticipated award, we expect to have the first Army unit equipped in FY18," the Army said. "Army procurement will last until approximately 2040 and replace a significant portion of the Army's legacy light tactical vehicle fleet with 49,099 new vehicles."
The Marine Corps is expected to buy 5,500 of the vehicles that are designed to combine the mobility of the Humvee with the protection of the heavily armored MRAP (Mine-Resistant Ambush Protected) vehicle.
