Fresh off the Consumer Electronics Show, Oshkosh’s CEO John C. Pfeifer joined Market On Close to discuss the company’s latest A.I. developments for “everyday heroes.” He discusses the importance of A.I. and electrification in this work. Oshkosh grew revenue by double-digits all last year, and Pfiefer says they are seeing strong demand in access equipment and fire & emergency, where they have a three-year backlog.

Founded in 1917, Oshkosh (OSK) is an industrial company that creates specialized vehicles, like mail trucks, trash collection trucks, fire engines, concrete mixers, and fire equipment for locations like airports. According to its own history page, the foundation for the company was William Besserdich and Bernhard Mosling’s patent for a four-wheel drive system. Fitting for its Wisconsin roots, in the 1920s it was building snowplows, and in the 30s it debuted an earthmover utility vehicle. It’s been selling to the U.S. military since 1939 – beginning with snow removal vehicles to clear airstrips.

Now, Oshkosh is making a big push into E.V.s, perhaps an undersung participant in this sector dominated by Tesla (TSLA) talk. It has a contract with the USPS for electric mail trucks and touts an electric trash truck and electric fire truck on its site.

It is also interested in using A.I. and autonomous technology for safety, which is crucial in many of the industries it serves. For example, in 2023 the Bureau of Labor counted refuse and recyclable material collection as the fourth most dangerous civilian job in the U.S. Oshkosh’s use of LiDAR and radar technology to help its robots “see” is fascinating to explore.

LiDAR, which is similar to radar except using lasers instead of radio waves to measure distance and detect objects, is also being used in archaeology to map sites down to “millimeter-scale resolution” (The Guardian, 2023). The next step is using A.I. to filter through those reams of data to distinguish between objects and to “see” what an object even is.

As an example, soda cans roughly have the same shape, dimension, materials and are highly recyclable – but some are dented, crushed, or otherwise out-of-mold. The machine, like our eyes as young children, has to learn to recognize the oddities of nature and reconcile them with the original “blueprint”. The more data and learning it has, the better it will be – much like how generative A.I. has gotten better at creating hands after early iterations were mocked for extra fingers and other errors. The example Pfiefer gives for their garbage trucks is learning the difference between mailboxes and trash cans.

Pfiefer says autonomous vehicle expertise came from their contracts with the Department of Defense, and they’ve been at it “for a long time.” He notes the shift from mechanical engineering to software – “we’re almost becoming a software company!” – as technology evolves. To some extent, the same is true for all carmakers: there’s an incredible amount of computers in every new car on the market. Repetitive tasks are a great area for A.I. adoption, Pfiefer adds, and not just for picking up trash: he discusses the sensors all over their USPS mail trucks to collect data for the organization at large.

Pfiefer also highlights airports as a long-term growth market as air travel demand and airport upgrades continue. “Nobody spent any money during the pandemic,” he says, so fleet upgrades are overdue. Their customers include Delta (DAL), United (UAL), and Southwest (LUV), and every time they buy new planes, they also must buy the access equipment Oshkosh offers.

However, even with their strong revenue growth and technological innovation, the stock is down about 14% year-over-year, hitting a 52-week low on Jan. 10. Is the quiet turnover of industry and infrastructure beneath the market’s radar, or already priced in?

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