After meeting with BAE Systems executives in Sealy on Monday, Rep. Michael McCaul (R-Austin) was joined by elected officials and economic developers at Sealy City Hall to talk about what lies ahead in the wake of the loss of a major military contract for the Austin-county manufacturer.

Late Friday, the U.S. Army announced it had rejected BAE’s appeal of an earlier decision to award a contract to continue producing the Army’s Family of Military Tactical Vehicles – or FMTVs – to Wisconsin-based Oshkosh Corporation.

The FMTV has been produced at BAE’s Sealy plant for 18 years.

Surrounded by Sealy Mayor Nick Tirey, Austin County Judge Carolyn Bilski, Sealy Economic Development Corporation Executive Director Kim Meloneck and Katy Area Economic Development Council CEO Lance LaCour, McCaul said the Sealy facility still had a future.

Even if the British-owned manufacturer had retained the FMTV contract, production was only scheduled for two more years, the congressman pointed out.

“I believe with every crisis there comes a real opportunity,” McCaul said. “Stewart & Stevenson, the predecessor to BAE, used to produce commercial vehicles. I believe there’s a real opportunity that BAE was going to have to look at in the near future anyway, and that is diversification.”

McCaul said he had been in “high-level discussions” BAE officials about securing other contracts, both from the public and private sector. Some of the manufacturing opportunities include buses, commercial vehicles and boats, he said.

McCaul said he was not at liberty to discuss the specifics of BAE’s plans, but stressed the facility was a long way from closing down.  

“There are all sorts of opportunities that I believe are out there for long-term economic vibrancy of the BAE facility. We have a state-of-the-art facility and it’s not going to close down tomorrow,” he said.

McCaul also took the opportunity to again criticize the Army’s handling of the contract, noting the revaluation had been sent back to the same decision-makers who made the initial decision to give the job to Oshkosh.

“We obviously disagree with that decision. We think it was the wrong decision, certainly for Sealy; certainly for the military because we will see a gap in the production of these military vehicles; certainly for the taxpayer who is going to end up spending more money in the production of these vehicles and, lastly, it was the wrong decision for the workers at the BAE facility right here in Austin County,” McCaul said. “Unfortunately, the military sent it back to the same decision-makers who made the bad decision in the first place. I think that’s a flawed process as well; it should go back to independent decision-makers who didn’t make the bad decision in the first place.”

He also questioned whether Oshkosh would be able to meet the deadline to begin production on the FMTV.

“Oshkosh doesn’t have the capability to build these vehicles, so we fully anticipate there’s going to be a gap in the production of these vehicles sometime in the beginning of 2011 and mid-2011,” McCaul said. “Oshkosh said they cannot produce this vehicle until mid-2011, so who’s going to pick up the slack?”

On possibility the congressman suggested was a “bridge contract” with BAE to continue producing the FMTV until Oshkosh was fully prepared to take over.

McCaul also said the decision to award the FMTV contract to Oshkosh was the latest in a “disturbing trend” by the Obama Administration to “pull jobs out of Texas and send them somewhere else.”

Sealy Mayor Nick Tirey called the contract award “a bad decision for our community,” but pledged to continue the fight to keep BAE open.

“We are going to continue to fight; we are going to continue to move forward; we are going to continue to create jobs, to create revenue and to make this a better place today, tomorrow and in the future,” Tirey said. “The City of Sealy has been around since 1879. I’m sure they had a lot of ups and downs prior to what we’ve had today, and they lived through it and became a better community and a better city for it and we we’re going to continue to do that in the future.”

Austin County Judge Carolyn Bilski echoed the mayor’s sentiments.

“We are creative and innovative and we will come back stronger and better than ever,” she said.

Asked by a reporter if recent job losses by predominantly-Republican Texas to traditionally-Democratic states like Wisconsin could be politically-motivated, McCaul said “we don’t’ have any proof of that,” but again said it was a “disturbing trend.”

“When you see jobs being taken out of a red state to a blue state, that’s a concern,” McCaul said. “Policies of this administration are impacting Texas in a negative way.”

BAE currently employs more than 3,000 people, about 1,000 of which live in Katy.

The Katy Area Economic Development Council had previously estimated losing the contract would have a $1.8 billion impact on the region’s economy.

Late last year, the Army awarded the $3 billion contract to continue producing the FMTV to Wisconsin-based Oshkosh Corporation. That contract called for Oshkosh to produce 23,300 of the combat trucks and trailers over a five-year period.

In addition BAE and Oshkosh, Illinois-based Navistar was also a bidder. 

BAE protested the award through the Government Accounting Office, citing what it said were flaws in the bid evaluation process.  The GAO sided with BAE and recommended the Army re-bid the contract.

In an announcement late Friday, the Army said it had re-evaluated the proposals and was sticking with its original decision to award the contract to Oshkosh.

In addition to the Sealy manufacturing operation, BAE has storage and support facilities in the Park 10 area and Sugar Land.