Rick Barrett

Milwaukee Journal Sentinel

The U.S. Postal Service has chosen an overseas firm that's partnered with a Milwaukee manufacturer to build prototypes of the next generation of postal service vehicles – a step toward a contract that, if won, could bring a new factory and about 1,000 jobs to the old Tower Automotive site on Milwaukee’s north side.

REV Group, led by former Bucyrus International CEO Tim Sullivan, will build the prototype vehicles in Milwaukee’s Century City business park in partnership with Karsan Otomotive, of Istanbul.

Karsan designs and manufactures gas and electric automobiles and specialty vehicles and has built vehicles for European automaker Peugeot.

The joint venture of Karsan and REV Group is competing with five other vehicle manufacturers, also awarded contracts to build postal service prototypes, for a $6.3 billion contract that would replace thousands of aging mail-delivery vehicles over about a seven-year period.

Oshkosh Corp, the Oshkosh-based manufacturer of military trucks, is one of those five, along with vehicle makers AM General, Utilimaster, VT Hackney and Mahindra, an automotive manufacturer based in India.

In the REV Group and Karsan partnership, Karsan will provide the hybrid-vehicle technology for the postal service prototype trucks, and REV Group will assemble them in Milwaukee over about the next nine months.

Sullivan said the Karsan/REV Group vehicles will use new technologies that Karsan has been developing in Europe.

“I think we have a pretty good story to tell. If our technology really works, I like our chances of getting at least part of the contract,” Sullivan said.

REV Group, Oshkosh and the other vehicle builders have until September 2017 to submit their prototypes to the Postal Service. Then the government will embark on six months of testing the vehicles.

Half of the prototypes will use hybrid technologies, including alternative fuel capabilities, the Postal Service said in a statement.

The winner of the vehicle contract could be announced in early 2018.

Southeast Wisconsin has decades of experience making specialty vehicles. There's an infrastructure, supply chain and labor force here to support it, much like the Fox Valley has established for Oshkosh Corp.

If Karsan and REV Group win the contract, REV Group says it would build up to a 500,000-square-foot facility at the former Tower Automotive site and employ approximately 1,000 people — a potential game-changer for one of the most impoverished areas of the city.

In 2000, Tower Automotive moved a Ford Ranger truck frame line to Minnesota and a heavy truck frame line to Mexico, resulting in the loss of about 750 jobs in Milwaukee. Troubles with major automotive companies led to hundreds more layoffs at the company not long afterward.

The company went bankrupt in 2005 and closed its operations at the site in March 2006.

Century City is the redevelopment of a large portion of the former A.O. Smith/Tower Automotive Inc. complex into a business park and other new uses — with the first building located just south of W. Capitol Drive near N. 31st. St.

REV Group will only need about a dozen people to build the prototype vehicles. If Karsan and REV Group win the final vehicle contract, however, it could have a huge impact on employment in the central city.

“To have the opportunity to do this in Milwaukee, at Century City, would be a double bottom-line win for the city,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.

Sullivan, who headed South Milwaukee-based Bucyrus International until shortly after it became the mining equipment division of Caterpillar Inc. in 2011, is president and CEO of REV Group, a $2.2 billion company that employs more than 6,000 people at 16 U.S. plants making ambulances, fire trucks, buses, vans and other vehicles.

This would be the company's first plant in Wisconsin, and it could ultimately be used to build vehicles other than mail delivery trucks, Sullivan said.