OSHKOSH TRUCK CORP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K

(Mark One)

(X) Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1998, or

( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from

_____________________________ to _____________________________

Commission file number: 0-13886

Oshkosh Truck Corporation
(Exact name of registrant as specified in its charter)

Wisconsin 39-0520270
(State or other jurisdiction of (I.R.S.Employer Identification)
incorporation or organization)

P. O. Box 2566, Oshkosh, WI 54903-2566
(Address of principal executive offices) (zip code)

Registrant's telephone number, including area code: (920) 235-9151
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Common Stock
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

Aggregate market value of the voting stock held by non-affiliates of
the registrant as of November 18, 1998:

Class A Common Stock, $.01 par value - No Established Market Value
Common Stock, $.01 par value - $216,104,000

Number of shares outstanding of each of the registrant's classes of
common stock as of November 18, 1998:

Class A Common Stock, $.01 par value - 296,888 shares
Common Stock, $.01 par value - 8,124,613 shares

DOCUMENTS INCORPORATED BY REFERENCE

Parts I, II and IV incorporate, by reference, portions of the Annual
Report to Shareholders for the year ended September 30, 1998.

Part III incorporates, by reference, portions of the Proxy Statement
dated December 23, 1998.

OSHKOSH TRUCK CORPORATION

Index to Annual Report on Form 10-K

Year ended September 30, 1998

Page

PART I.

ITEM 1. BUSINESS ..........................................................3

ITEM 2. PROPERTIES .......................................................12

ITEM 3. LEGAL PROCEEDINGS.................................................13

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.............................................14

EXECUTIVE OFFICERS OF THE REGISTRANT .............................14

PART II.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED STOCKHOLDER MATTERS ...........................15

ITEM 6. SELECTED FINANCIAL DATA...........................................16

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS..............................................16

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK..........................................16

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................16

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE......................16

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT ...........................................16

ITEM 11. EXECUTIVE COMPENSATION ...........................................16

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT .......................................16

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.................................................16

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K ....................................17

INDEX TO EXHIBITS.................................................21

2

Forward-Looking Statements

As used herein, the "Company" refers to Oshkosh Truck Corporation, including
Pierce Manufacturing, Inc. ("Pierce"), McNeilus Companies, Inc. ("McNeilus") and
its other wholly-owned subsidiaries, and "Oshkosh" refers to Oshkosh Truck
Corporation, not including Pierce or McNeilus or their wholly-owned
subsidiaries. This Annual Report on Form 10-K contains "forward looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact included in this report, including, without
limitation, statements regarding the Company's future financial position,
business strategy, budgets, projected costs and plans and objectives of
management for future operations, are forward-looking statements. In addition,
forward-looking statements genterally can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "intend",
"estimates", "anticipate", "believe", "should", "plans", or "continue", or the
negative thereof or variations thereon or similar terminology. Although the
Company believes the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from the Company's expectations include, without limitation, the
following: (1) the consequences of financial leverage; (2) the cyclical nature
of the construction industry; (3) the risks related to reductions or changes in
government expenditures; (4) the uncertainty inherent in government contracts;
(5) the challenges of integration of acquired businesses; (6) competition; (7)
disruptions in the supply of parts or components from sole source suppliers and
subcontractors; (8) product liability and warranty claims; (9) labor relations
and market conditions; and (10) unanticipated events relating to resolving Year
2000 issues. All subsequent written and oral forward-looking statements
attributable to the Company, or persons acting on its behalf, are expressly
qualified in their entirety by these cautionary statements.

PART I

Item 1 BUSINESS

The Company

The Company is a leading designer, manufacturer and marketer of a broad
range of fire and emergency apparatus and specialty commercial and military
trucks under the "Oshkosh," "Pierce," "McNeilus" and "MTM" trademarks. The
Company's custom and commercial fire apparatus and emergency vehicles include
pumpers, aerial and ladder trucks, tankers, heavy-duty rescue vehicles, wildland
rough terrain response vehicles, aircraft rescue and firefighting ("ARFF") and
snow removal vehicles. The Company's commercial truck lines include refuse truck
bodies and rear- and forward-discharge concrete mixers. As the leading
manufacturer of severe-duty heavy tactical trucks for the United States
Department of Defense ("DoD"), the Company manufactures vehicles that perform a
variety of demanding tasks such as hauling tanks, missile systems, ammunition,
fuel and cargo for combat units. McNeilus has an equity interest in
Oshkosh/McNeilus Financial Services Partnership ("OMFSP") which provides lease
financing to the Company's customers.

The Company's objective is to continue to enhance market positions by
providing innovative design, sophisticated engineering, efficient, low-cost
manufacturing, extensive distribution and superior customer service to its
commercial, municipal and military customers within its core markets.

Competitive Strengths

The following competitive strengths support the Company's business
strategy:

Strong Market Positions. The Company has developed strong market positions
in each of its core businesses, which management attributes to the Company's
reputation for innovation, vehicle performance, reliability and customer
service. The Company has the leading share of the severe-duty heavy tactical
truck segment of the domestic defense truck market, and also believes it has a
leading share in: (i) custom and commercial fire apparatus, including pumpers,
aerial and ladder trucks, tankers, heavy duty rescue, wildland rough terrain
response vehicles and ARFF vehicles for the domestic fire apparatus market; (ii)
the domestic refuse truck body market; (iii) the domestic rear- and
forward-discharge concrete mixer markets; and (iv) the domestic airport snow
removal vehicle market. The Company intends to continue to strengthen its market
share by capitalizing on its strong reputation, introducing innovative products
and services and leveraging its extensive distribution capabilities.

Extensive Distribution Capabilities. With the addition of the commercial
and municipal distribution capabilities of Pierce and McNeilus, the Company has
established an extensive domestic and international distribution system for
specialty trucks and truck bodies covering over 70 countries. In addition to its
network of dealers and distributors, the Company employs over 100 in-house sales
and service representatives. Management believes the Company's broad
distribution system has enabled the Company to: (i) maximize sales of new
products and technologies: (ii) become a benchmark for government customers in
establishing their bid

3

specifications; (iii) provide customer service on a national and international
scale; and (iv) reduce distribution expenses through significant economies of
scale.

Flexible and Efficient Manufacturing. The Company believes it has
competitive advantages over larger truck manufacturers in its specialty truck
markets due to its manufacturing flexibility and custom fabrication
capabilities. For example, the Company has successfully configured its defense
truck and fire apparatus manufacturing plants for the simultaneous manufacture
of many different types and models of vehicles on the same assembly line. In
addition, the Company believes it has a competitive advantage over smaller
competitors due to its: (i) manufacturing in relatively higher volumes; (ii)
purchasing power across its product lines; and (iii) investing in fixturing and
robotics to improve efficiency and reduce costs.

Quality Products and Customer Service. Oshkosh, Pierce and McNeilus have
each developed strong brand recognition based on their commitments to meet the
stringent product quality and reliability requirements of their customers and
the specialty truck markets they serve. The Company's commitment to product
quality is exemplified by the ISO 9001 certification of Oshkosh and Pierce,
which achieved ISO 9001 certification in April 1998. The Company also achieves
high quality customer service through its extensive service and parts support
program, which is available to domestic customers 365 days a year in all product
lines throughout the Company's distribution systems.

Proprietary Components. The Company's advanced design and engineering
capabilities have contributed to the development of proprietary, severe-duty
components that enhance truck performance, reduce manufacturing costs and
strengthen customer relationships. These proprietary components include front
drive and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel
steering system, independent suspension, the Sky-Arm articulating aerial ladder
and the McNeilus Auto Reach Arm. Management believes these proprietary
components provide the Company a competitive advantage by increasing its
vehicles' durability, operating efficiency and vehicle effectiveness. The
integration of many of these components across various product lines also
reduces the Company's costs to manufacture its products compared to
manufacturers who simply assemble purchased components.

Business Strategy

The Company is focused on increasing its net sales, profitability and cash
flow by capitalizing on its competitive strengths. Key elements of the Company's
business strategy include:

Focusing on Specialized Truck Markets. The Company plans to continue its
focus on those specialized truck and truck body markets where it has strong
market positions and where the Company can leverage synergies in purchasing,
manufacturing, technology and distribution. The Company's objective is to
achieve and maintain market leadership through internal growth and strategic
acquisitions. Management believes the higher sales volumes associated with
market leadership would allow the Company to continue to enhance productivity in
manufacturing operations, fund innovative product development and invest in
further expansion.

Expanding Distribution and International Sales. The Company plans to add
new distribution capabilities for the municipal segment of the refuse truck body
market and in targeted geographic areas in the domestic fire apparatus market.
The Company intends to increase international sales beyond the $35.0 million
volume achieved in fiscal 1998 by introducing McNeilus refuse truck bodies,
rear-discharge concrete mixers and ready-mix batch plants to international
markets and by continuing the expansion of Pierce's international customer base
through the Company's expanding international distribution capabilities.

Reducing Costs While Maintaining Quality. The Company actively benchmarks
its competitors' costs and best industry practices, and continuously seeks to
implement process improvements to increase cash flow and improve profitability.
With each of its acquisitions, the Company has established cost reduction
targets. At Pierce, the Company exceeded its two-year cost reduction target of
$6.5 million as a result of consolidating facilities, reengineering the
manufacturing process and leveraging increased purchasing power. The Company is
planning for additional cost savings at Pierce in fiscal 1999. The Company
intends to further improve efficiencies by taking advantage of the Company's
greater purchasing power and by developing additional manufacturing synergies
across product lines following its acquisition of McNeilus and has established a
$5-$7 million two-year cost reduction target with respect to this acquisition.
In the first seven months following the acquisition of McNeilus, $1.45 million
of the cost reduction target was realized.

Introducing New Products. The Company has increased its emphasis on new
product development in recent years, and seeks to expand sales by introducing
new or improved products in its core markets, either through internal
development or strategic acquisition. For example, in December 1997, the Company
purchased the aerial fire apparatus product line of Nova Quintech, a division of
Nova Bus Corporation. This acquisition broadened Pierce's aerial product line
and provided Pierce with three new products in fiscal 1998.

4

Diversifying DoD Contracts. The Company is seeking to diversify its
business with the DoD beyond its traditional contracts relating to the
manufacture of severe-duty heavy tactical trucks. Management believes the
Company has a reputation within the DoD for advanced engineering, quality
manufacturing and vehicle performance that will assist the Company in obtaining
contracts to provide other types of vehicles to the DoD. For example, the
Company was one of two manufacturers selected to participate in a DoD program to
produce upgraded medium-duty prototype vehicles for the Medium Tactical Truck
Remanufacture ("MTTR") program. The Company expects the initial production
contract to be awarded to the Company or the competing bidder in December 1998.
The Company is also one of two manufacturers currently preparing prototype
Family of Medium Tactical Vehicles ("FMTV") trucks for testing by the DoD. Upon
conclusion of this testing, the Company will compete to be a second source
supplier for the $15.6 billion FMTV program which extends through 2020.

Increasing Aftermarket Sales and Service. The Company is focused on
increasing its aftermarket sales and service revenues. In the fire apparatus and
commercial truck markets, the Company has expanded and plans to continue to
expand its refurbishment facilities and parts distribution capabilities. In the
defense truck market, the Company plans to continue to pursue parts and
maintenance contracts for upgrading and reconditioning trucks at both domestic
and international U.S. military bases.

Pursuing Strategic Acquisitions. The Company intends to selectively pursue
additional strategic acquisitions, both domestically and internationally, in
order to enhance its product line and expand its international presence in
specialized truck markets. The Company intends to focus its acquisition strategy
in specialty truck and truck body markets where it can enhance its strong market
positions and achieve significant acquisition synergies.

Products and Markets

The Company is focused on the following core specialty truck and truck body
markets:

Fire Apparatus. The Company, through Pierce, is among the leading domestic
manufacturers of custom and commercial fire apparatus. The Company primarily
serves domestic governmental markets, but also sells fire apparatus to airports,
universities and large industrial companies. In addition, the Company sells fire
apparatus in international markets. Pierce's history of research and development
in consultation with firefighters has resulted in a broad product line that
features a wide range of innovative, high-quality custom and commercial
firefighting equipment with advanced fire suppression capabilities. The
Company's engineering expertise also allows it to design its vehicles to meet
stringent government regulations for safety and effectiveness.

Refuse Truck Bodies. Management believes the Company, through McNeilus, is
a leading domestic manufacturer of refuse truck bodies for the waste services
industry. The Company manufactures a wide range of automated rear, front, side
and top loading refuse truck bodies, which the Company mounts on commercial
chassis. The Company sells its refuse vehicles primarily to commercial waste
management companies. Management believes the Company's refuse vehicles have a
reputation for efficient, cost-effective, dependable operation that supports the
Company's continued expansion into municipal and international markets.

Concrete Mixers and Snow Removal Vehicles. Management believes the Company
is a leading domestic manufacturer of rear- and forward-discharge concrete
mixers. The Company sells rear- and forward-discharge concrete mixers and
portable concrete mixer plants to construction companies throughout the United
States and internationally. Management believes the Company is one of the only
domestic concrete mixer manufacturers that markets both rear- and
forward-discharge concrete mixers.

The Company is also among the leading domestic manufacturers of snow
removal vehicles for airports. The Company's specially designed airport snow
removal vehicles can cast up to 4,000 tons of snow per hour and are used by some
of the largest airports in the United States, such as Denver International
Airport, LaGuardia International Airport, Minneapolis-St. Paul International
Airport and O'Hare International Airport. Management believes the reliability of
the Company's high performance snow removal vehicles contributes to its strong
market position.

Defense Trucks. The Company has sold products to the DoD for over 70 years
and is the leading manufacturer of a broad line of severe-duty heavy tactical
trucks for the DoD. The Company's proprietary military all-wheel drive product
line includes: (i) the Palletized Load System ("PLS"), a highly mobile
self-contained truck and trailer system that loads and unloads a wide range of
cargo in a short period of time; (ii) the Heavy Expanded Mobility Tactical Truck
("HEMTT"), a cross-country cargo and supply carrier that, among other tasks, is
used for direct rearming of the Multiple Launch Rocket System, transport of
Patriot erector/launchers, resupply of field artillery ammunition and refueling
of tanks, trucks and helicopters in forward areas; (iii) the Heavy Equipment
Transporter ("HET"), the primary hauler of the M1A1 main battle tank and also a
hauler of other tanks, fighting and recovery vehicles, self-propelled howitzers
and construction equipment; and (iv) the Logistic Vehicle System ("LVS"), a
highly mobile cargo carrier with a maximum payload capacity of 20 tons. The
Company also exports its severe-duty heavy tactical trucks to approved foreign
customers.

5

The Company has developed a strong relationship with the DoD that has
resulted in the Company operating under "family contracts" with the DoD for the
PLS, HEMTT, HET and LVS and for DoD vehicle parts. Under the vehicle family
contracts, the DoD orders a specified range of volume of trucks at fixed prices,
which allows the Company to predict and plan its products and delivery schedules
for vehicles. These family contracts were established in 1996 and 1997 and
expire in fiscal years 1999 and 2000.

Markets and Products Description

Fire and Emergency Market Firefighting apparatus that are
Custom Pumpers......... equipped with a water tank, water
pump, and foam system (optional).
The Pierce line of
* Quantum - Flagship of the Pierce
custom pumpers is available on each
of these line. Features advanced
ergonomics, custom chassis: unique
styling, enhanced maneuverability,
and a cab that seats up to 10
personnel.
* Lance 2000 - Features a split-tilt
cab. High gross vehicle weight
rating enables this truck to support
aerial devices.
* Dash 2000 - Custom tilt cab,
designed for comfort, space and
maneuverability.
* Saber - Value-priced chassis
featuring a tilt-cab, select
options, and seating for up to 8
personnel.
* Arrow - Cab-forward design.
Commercial Pumpers..... Firefighting apparatus that arewith
a water tank, equipped water pump
and foam system (optional).
Commercial pumpers have the
firefighting bodies mounted on
customer-specified commercial truck
chassis.
Aerial Apparatus....... Firefighting apparatus with an
aerial device mounted on the body
for access and rescues in elevated
locations. These devices are
available on the Pierce line of
custom chassis.
Products include:
* 105' and 85' aerial platforms.
* 75' and 105' heavy-duty ladders.
* 105' super heavy-duty ladder.
* 105' aerial tiller - Tractor-drawn
trailer has an Aerial ladder mounted
on the trailer and steering
capability for the rear axle.
* Sky Arm - Four-section, 100-foot
aerial ladder with an articulating
platform.
* Sky Five - Five-section aerial
ladder that is available in rear-
and mid-mount configurations. The
Company believes that, at rest, this
is the shortest 100-foot aerial
ladder available.
* Sky Boom - Elevated water tower
boom with an attached ladder.
Available in 55' and 60' lengths.
Rescue Vehicles........ These units are designed to carr
and large personnel quantities of
equipment. Pierce rescue vehicles
are used for extrication, water
rescue, hazardous materials
response, fire fighting, command
center, and lighting operations.
Mini-Pumper............ This initial response vehicle is a
fast, lightweight, scaled-down
version of full-sized pumper.
Elliptical Tanker...... Elliptical tankers are used to large
amounts of transport water to fire
scenes and can be equipped with a
variety of pumping packages so the
vehicles can also be used as a front
line of attack. Water capacity
ranges from 1,500 to 5,000 gallons.
Hawk Wildland Rapid
Response
Vehicle.............. Four-wheel-drive vehicle takes
firefighters into off-road terrain
that can be difficult or even
impassable for larger,
two-wheel-drive pumpers. Designed
specifically as a first-strike
vehicle, the Hawk features a water
tank, water pump, and a compressed
air foam system.
H-Series............... An airport snow removal vehicle that
can clear 4,000 tons of snow per
hour. Optional sweepers, blowers and
plows are Available.
P-Series............... A super heavy-duty frame vehicle
that can break through heavily
drifted snow. The vehicle also has
the added flexibility of being
durable enough to meet the demands
of off-road applications.
6

Refuse Truck Body Market
Front Loader........... Refuse is loaded into a container at
the front of the vehicle; The
container is lifted by large arms
and dumped into the body. The front
loader can carry 40 to 43 cubic
yards of refuse and is available on
a selection of commercial chassis. A
self-leveling system for keeping the
container level during dumping cycle
is optional.
Rear Loader............ McNeilus offers three different
models of rear-loading refuse
bodies. Refuse is loaded into the
rear of the vehicle and compacted
toward the front of the refuse body.
McNeilus rear loaders can carry from
17 to 32 cubic yards of refuse
Autoreach Automated Side
Loader............... This refuse body features a boomless
arm for loading large containers of
refuse from the side of the vehicle.
The side-loading arm is designed to
articulate left to right and dump
from any angle. The driver can keep
the vehicle in one position after
stopping for a pick-up rather than
having to move the vehicle to put
the arm in the proper position for
lifting the next refuse container.
The McNeilus Autoreach is available
in 28-, 33- and 36-cubic yard
capacities and features a continuous
packing cycle.
Manual Side Loader..... Designed for one-person refuse
collection operations and can carry
up to 33 cubic yards. The body can
be loaded from either side and is
typically mounted on a low-entry
chassis.

Concrete Mixer Market
F-Series............... Designed for a variety of
severe-duty all-wheel drive
applications, including
rear-discharge concrete mixers,
concrete block trucks, dry wall
haulers, wall form trucks, digger
derricks, aerial buckets and oil
field service.
S-Series............... A forward-discharge concrete mixer
that allows the driver to approach a
job with greater visibility,
improved placement and greater
safety. The two-speed transfer case
and front driving gear gives extra
power to maneuver into tighter spots
in challenging terrain.
Bridgemaster III....... Rear-discharge mixer featuring a
trailing axle. This mixer lineup can
carry from 9 to 11.5 cubic yards of
concrete. The Bridgemaster IIIs are
available on a variety of commercial
truck chassis.
Standard Rear Discharge
Mixer................ Rear-discharge concrete mixer that
can handle from 4 to 11 cubic yards
and are available with a variety of
axle Configurations including tag
axles. Options include remote
pendant controls for controlling
discharge near the rear of the
vehicle.
Sliding Mixer System... Mounted on a trailer that can be
extended up to 13 feet depending on
the size of the mixer selected. It
is designed for transport and large
pours. It typically can carry 11 to
13 yards of concrete.
Defense Truck Market
Heavy Expanded Mobility
Tactical Truck
("HEMTT").............. Cross-country cargo and supply
carrier with maximum payload
capacity of 11 tons. The HEMTT is
used for direct rearming of the
Multiple Launch Rocket System,
transport of Patriot
erector/launchers and resupply of
field artillery ammunition and
refueling of tanks, trucks and
helicopters in forward areas.
Heavy Equipment
Transporter
("HET").............. Primary hauler of the M1A1 main
battle tank and also transports
other tanks, fighting and recovery
vehicles, self-propelled howitzers
and construction equipment.
Palletized Load System
('PLS").............. Cargo hauler with maximum payload
capacity of 33 tons. The truck and
trailer system hauls a variety of
cargo and can load or unload in a
short period of time.
Logistic Vehicle System
("LVS").............. Highly mobile cargo carriers with a
maximum payload capacity of 20 tons.
The LVS can carry military vehicles
and supply containers over rough
terrain and steep g grades due to
its separating chassis module
design.

7

Sales and Distribution

The Company believes it differentiates itself from many of its larger
competitors by tailoring its distribution to the needs of its specialized truck
markets and from its smaller competitors with its national and global sales and
service capabilities. Distribution personnel use demonstration trucks to show
customers how to properly use the Company's trucks and truck bodies, compared to
the showroom sales approach of the typical dealers of large truck manufacturers.
The Company backs all products by same-day parts shipment, and its service
technicians are available in person or by telephone to domestic customers 365
days a year. The Company believes that its dedication to keeping its trucks
in-service in demanding conditions worldwide has contributed to customer
loyalty.

The Company provides its salespeople, representatives and distributors with
product and sales training on the operation and specifications of its products.
The Company's engineers, along with its product managers, develop operating
manuals and provide field support at truck delivery for certain markets.

Distributors, where used, enter into agreements with the Company that allow
for termination by either party generally upon 90 days' notice. Distributors are
not permitted to market and sell competitive products.

Fire and Emergency. The Company believes that the geographical breadth,
size and quality of its fire apparatus sales and service organization are
competitive advantages in a market characterized by a few large manufacturers
and numerous small, regional competitors. Pierce's fire apparatus are sold
through 38 sales and service organizations with more than 260 sales
representatives nationwide, which combine broad geographical reach with
frequency of contact with fire departments and municipal government officials.
Management believes that frequency of contact and local presence are important
to cultivate major, and typically infrequent, purchases involving the city or
town council and fire department, purchasing, finance, and mayoral offices,
among others, that may participate in a fire truck bid and selection. After the
sale, Pierce's nationwide local parts and service capability is available to
help municipalities maintain peak readiness for this vital municipal service.

Pierce primarily focused its sales efforts in rural and small suburban
domestic markets prior to its acquisition by Oshkosh. Due to the Company's
expertise and long-standing relationships in numerous large urban markets, the
Company has extended Pierce's sales focus into several key metropolitan areas.

Pierce substantially strengthened its competitive position overseas in
fiscal 1998. Pierce's worldwide distribution network was expanded to include 43
international representatives. This network has delivered several new orders
including the award in December 1997 of a $35 million contract for 130 custom
fire trucks for Saudi Arabia to be delivered from November 1998 through October
1999.

The Company has invested in the development of sales tools for its
representatives that it believes creates a competitive advantage in the sale of
fire apparatus. For example, Pierce's Pride II PC-based sales tool can be used
by its sales representatives to develop the detail specifications, price the
base truck and options and draw the configured truck on the customer's premises.
The quote, if accepted, is directly interfaced into Pierce's sales order
systems.

Oshkosh maintains 22 full-time sales and service dealers focused on the
sale of snow removal vehicles, principally to airports, but also to
municipalities, counties and other governmental entities.

Defense. Substantially all domestic defense products are sold direct to
principal branches of the DoD. The Company maintains a liaison office in
Washington, D.C. to represent its interests with the Pentagon, Congress and the
Office of the President. The Company also sells and services defense products to
foreign governments directly through four Company-owned international sales
offices, through agents, consultants and representatives, and through the United
States Foreign Military Sales ("FMS") program. The DoD has begun to rely on
industry for support and sustainability of its vehicles which has opened up new
opportunities for maintenance, service and contract support to the U.S. Army and
U.S. Marine Corps.

In addition to marketing its current truck offerings and competing for new
contracts in the medium- and light-duty segments, the Company actively works
with the Armed Services to develop new applications for its vehicles. For
example, the Company is:

o Developing new applications for its PLS vehicle beyond its traditional
ammunition transportation role. A contract for construction models has
already been awarded, and several other models of the PLS are currently
under evaluation.

o Modifying its HEMTT vehicle for alternate uses. The Company has
integrated a foam proportioning fire fighting package on a HEMTT for use
by the U.S. military and other governmental agencies in the
extinguishment of wildland fires. The HEMTT has also been modified to
include a load handling system to meet lower payload requirements.
8

o Upgrading existing products such as the HEMTT, PLS and HET in order to
achieve better performance and new technology. As an example, the
Company has separate development contracts for each product with the
U.S. Army to develop a new HEMTT, HET and PLS with new engines,
transmissions, transfer cases and numerous other components that
increase reliability and performance at reduced costs. In addition, the
HEMTT Extended Service Program ("ESP") and HET Technology Insertion
Program ("TIP") vehicles incorporate facets of the new "sealed hood"
concept in which vehicle systems are monitored electronically and
maintenance recommendations are delivered directly to the operator
without ever having to open the hood.

Commercial. Oshkosh maintains four distribution centers with 26 in-house
sales and service representatives in the U.S. to sell and service its forward-
and rear-discharge concrete mixers. All of the Oshkosh facilities provide full
service, mounting and parts distribution to customers in their geographic
regions, while two also have paint facilities. In addition, Oshkosh utilizes one
independent distributor in this market.

McNeilus operates eight distribution centers with 83 in-house sales and
service representatives in the U.S. to sell and service its refuse truck bodies,
rear-discharge concrete mixers and ready-mix batch plants. Six of such
distribution centers provide full service, mounting and parts distribution to
customers in their geographic regions while the remainder are primarily sales
offices with limited parts and service capabilities. Five of the McNeilus
distribution centers also have paint facilities and provide significant
additional paint and mounting services during peak demand periods.

With respect to McNeilus, the Company has begun to:

o Combine the McNeilus and Oshkosh distribution capabilities. Because
there is little geographic overlap between the rear-discharge markets of
McNeilus and the forward-discharge markets of Oshkosh, management
retained all existing distribution centers of both companies. The
Company believes that the combined network represents one of the largest
refuse truck body and concrete mixer distribution networks in the U.S.

o Apply Oshkosh's and Pierce's sales and marketing expertise in municipal
markets to increase sales of McNeilus refuse truck bodies to municipal
customers. Prior to the Company's acquisition of McNeilus, virtually all
McNeilus refuse truck body sales were to commercial customers. The
Company believes that commercial customers represent a majority of the
refuse truck body market. However, many municipalities purchase their
own refuse trucks. The Company believes that it is positioned to create
an effective municipal distribution in the refuse truck body market by
building upon its present base of municipal distributors. Following its
acquisition and new focus in municipal markets, McNeilus has been
awarded new business for the city of Los Angeles and has targeted other
major metropolitan areas.

o Offer McNeilus refuse truck bodies, rear-discharge concrete mixers and
ready-mix batch plants to Oshkosh's international dealers for sales and
service worldwide. McNeilus' international sales have historically been
limited because McNeilus has focused on the domestic market. However,
management believes that refuse body exports are a significant
percentage of certain competitors' sales, and represents a meaningful
opportunity for the Company. The Company has trained its international
Oshkosh and Pierce dealers to sell and service the McNeilus product line
and has commenced sales of McNeilus products through these dealers in
the first seven months following the acquisition.

Competition

The Company operates in highly competitive industries. The Company competes
in the fire apparatus and defense truck markets principally on the basis of
lowest qualified bid. To submit a qualified bid, the bidder must demonstrate
that the fire apparatus or defense truck meets stringent specifications and, for
most defense truck contracts, passes extensive testing. In addition, decreases
in the DoD budget have resulted in a reduction in the number and size of
contracts, which has intensified the competition for remaining available
contracts. The Company and its competitors continually undertake substantial
efforts in order to maintain existing levels of defense business and to succeed
in bid competitions for available contracts. In the refuse truck body and
concrete mixer markets, the Company also faces intense competition on the basis
of price, innovation, quality, service and product performance capabilities. As
the Company seeks to expand its sales of refuse truck bodies to municipal
customers, management believes the principal basis of competition for such
business will be lowest qualified bid.

In all of the Company's markets, competitors include smaller, specialized
manufacturers as well as large, mass producers. The Company believes that, in
its specialized truck markets, it has been able to effectively compete against
large, mass producers due to its manufacturing flexibility and specialized
distribution systems. The Company believes that its competitive cost structure,
engineering expertise and global distribution systems have enabled it to
effectively compete with other specialized manufacturers.

9

Pierce's principal competitors in the fire apparatus market include
Emergency One, Inc. (a subsidiary of Federal Signal Corporation), Kovatch Mobile
Equipment Corp., and numerous small, regional manufacturers. Principal
competitors of McNeilus, in the refuse truck body market, include The Heil
Company (a subsidiary of Dover Corporation), Leach Company, and McClain E-Z
Pack, Inc. Principal competitors of McNeilus and Oshkosh in concrete mixer
markets include Advance Mixer, Inc., London Machinery, Inc., Rexworks, Inc., and
T.L. Smith Machine Co., Inc. Oshkosh's principal competitors in snow removal
markets include Monroe Truck Equipment, Inc. and Stewart & Stevenson Services,
Inc. Oshkosh's principal competitors for DoD contracts include AM General
Corporation and Stewart & Stevenson Services, Inc. The Company also faces
competition from its competitors for acquisition opportunities.

Several of the Company's competitors have greater financial, marketing,
manufacturing and distribution resources than the Company. There can be no
assurance that the Company's products will continue to compete successfully with
the products of competitors or that the Company will be able to retain its
customer base or to improve or maintain its profit margins on sales to its
customers, all of which could materially adversely affect the Company's
financial condition, results of operations and debt service capability.

Customers and Backlog

Sales to the DoD comprised approximately 28% of the Company's net sales for
fiscal 1998. No other single customer accounted for more than 2% of the
Company's sales for this period. A substantial majority of the Company's net
sales are derived from customer orders prior to commencing production.

The Company's backlog at September 30, 1998 was $377.5 million compared to
$361.1 million at September 30, 1997. Backlog related to DoD contracts decreased
by $94.1 million in 1998 compared to 1997 due to the completion of the IPF
contract and because the Company's family contracts are coming up for renewal.
The Company's fire and emergency and commercial backlogs increased by $51.2
million and $59.3 million, respectively, generally due to higher sales volumes
for Pierce and due to the inclusion of McNeilus in 1998. Substantially all of
the Company's backlog pertains to fiscal 1999 business.

Reported backlog excludes purchase options and announced orders for which
definitive contracts have not been executed. Additionally, backlog excludes
unfunded portions of DoD long-term family contracts. Backlog information and
comparisons thereof as of different dates may not be accurate indicators of
future sales or the ratio of the Company's future sales to the DoD versus its
sales to other customers.

Government Contracts

Approximately 28% of the Company's net sales for fiscal 1998 were made to
the U.S. government under long-term contracts and programs, substantially all of
which were in the defense truck market. Accordingly, a significant portion of
the Company's sales are subject to inherent risks, including uncertainty of
economic conditions, changes in government policies and requirements that may
reflect rapidly changing military and political developments and the
availability of funds.

The Company's sales into defense truck markets are substantially dependent
upon periodic awards of new contracts and the purchase of base vehicle
quantities and the exercise of options under existing contracts. The Company's
existing contracts with the DoD may be terminated at any time for the
convenience of the government. Upon such termination, the Company would
generally be entitled to reimbursement of its incurred costs and, in general, to
payment of a reasonable profit for work actually performed.

In November 1996, the U.S. Army Tank Automotive and Armaments Command
awarded the Company and one other defense contractor $6.9 million prototype
contracts for Phase I competition of the MTTR program. The MTTR program was
initiated to update and modernize the 5-ton tactical vehicle fleet of the U.S.
Marine Corps and the U.S. Army. The goal of the U.S. Marine Corps portion of the
program is to remanufacture the current configuration to carry a much greater
payload with substantially increased cross-country mobility. The U.S. Army
portion of the program was designed to increase the useful life and decrease
operation and support costs of a portion of the U.S. Army's existing fleet but
this portion of the program was subsequently cancelled. Phase I covers the
design, development, and production of five prototype test vehicles for the U.S.
Marine Corps and five additional prototype test vehicles for the U.S. Army.
Testing of the ten-prototype test vehicles commenced August 1997 and was
concluded in fiscal 1998. Phase II of the program is currently expected to
include the production of up to 8,168 vehicles for the U.S. Marine Corps at a
value that could exceed $1.0 billion over a period of years. Competition for the
Phase II production contract is intense between the two Phase I contractors.
Phase I testing along with the Phase II proposal will determine the single
supplier of any production contract awarded. No assurance can be given that the
DoD will award a Phase II Contract or that federal budgets will provide future
funding for a Phase II contract. The DoD has targeted to announce an award of
the MTTR contract to either Oshkosh or its competition in December 1998.

10

The U.S. Army has announced a competition to add a second supplier to build
FMTV trucks. Oshkosh and one competitor have been awarded contracts to build
three trucks for testing by the DoD. Based on current plans announced by the
DoD, the winner of the competition would be awarded an initial production
contract for approximately 763 vehicles. Upon completion of this production
contract and the current supplier's present contract, the U.S. Army is expected
to conduct a competition between these two manufacturers for the production of
approximately 50,000 FMTV trucks. No assurance can be given that the DoD will
award the FMTV second source contract or that federal budgets will provide
future funding for the FMTV program.

Under firm fixed-price contracts with the government, the price paid to the
Company is generally not subject to adjustment to reflect the Company's actual
costs, except costs incurred as a result of contract changes ordered by the
government. The Company generally attempts to negotiate with the government the
amount of increased compensation to which the Company is entitled for
government-ordered changes that result in higher costs. In the event that the
Company is unable to negotiate a satisfactory agreement to provide such
increased compensation, the Company may file an appeal with the Armed Services
Board of Contract Appeals or the U.S. Claims Court. The Company has no such
appeals pending.

The Company, as a U.S. government contractor, is subject to financial
audits and other reviews by the U.S. government of performance of, and the
accounting and general practices relating to, U.S. government contracts, and
like most large government contractors, the Company is audited and reviewed on a
continual basis. Costs and prices under such contracts may be subject to
adjustment based upon the results of such audits and reviews. Additionally, such
audits and reviews can and have led to civil, criminal or administrative
proceedings. Such proceedings could involve claims by the government for fines,
penalties, compensatory and treble damages, restitution and/or forfeitures.
Under government regulations, a company or one or more of its subsidiaries can
also be suspended or debarred from government contracts, or lose its export
privileges based on the results of such proceedings. The Company believes, based
on all available information, that the outcome of all such audits, reviews and
proceedings will not have a material adverse effect on its consolidated
financial condition or results of operations.

Suppliers

The Company is highly dependent on its suppliers and subcontractors in
order to meet commitments to its customers, and many major components are
procured or subcontracted on a sole-source basis with a number of domestic and
foreign companies. Through its reliance on this supply network for the purchase
of certain components, the Company is able to avoid many of the preproduction
and fixed costs associated with the manufacture of those components. The Company
maintains an extensive qualification and performance measurement system to
control risks associated with such reliance on suppliers. The Company
occasionally experiences problems with supplier and subcontractor performance
and must identify alternate sources of supply and/or address related warranty
claims from customers.

While the Company purchases many costly components such as engines,
transmissions and axles, it manufactures certain proprietary components that are
deemed material to the Company's business. These components include front drive
and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel
steering system, independent suspension, the Sky-Arm articulating aerial ladder,
the McNeilus Auto Reach Arm, body structures and many smaller parts which add
uniqueness and value to the Company's products. Some of these proprietary
components are marketed to other manufacturers.

Engineering, Research and Development

The Company maintains three facilities for new product development and
testing with a staff of 46 engineers and technicians who are responsible for
improving existing products and development and testing of new trucks, truck
bodies and components. The Company prepares annual new product development and
improvement plans for each of its markets and measures progress against those
plans.

Virtually all of the Company's sales of fire apparatus require some custom
engineering to meet the customer's specifications. Engineering is also a
critical factor in defense truck markets due to the severe operating conditions
under which the Company's trucks are utilized, new customer requirements and
stringent government documentation requirements. In the refuse truck body,
concrete mixer and snow equipment markets, product innovation is highly
important to meet customers' changing requirements. Accordingly, the Company
maintains a permanent staff of over 240 engineers and engineering technicians,
and it regularly outsources significant engineering activities in connection
with major DoD bids and proposals.

For fiscal years 1998, 1997, and 1996, Oshkosh incurred engineering,
research and development expenditures of $9.7 million, $7.8 million and $6.3
million, respectively, portions of which were recoverable from customers,
principally the U.S. government.

11

Intellectual Property

Patents and licenses are important in the operation of the Company's
business, as one of management's key objectives is developing proprietary
components in order to provide the Company's customers with advanced
technological solutions at attractive prices. The Company holds in excess of 50
active domestic patents. Management believes patents for all-wheel steer and
independent suspension systems, which have remaining lives of 9 to 19 years,
provide the Company with a competitive advantage in the fire apparatus business
and the sale of ARFF and snow removal vehicles. The independent suspension
system was also added to the U.S. Marine Corps portion of the MTTR program,
which the Company believes should be a competitive advantage in the competition
for the Phase II production contract. While other proprietary components provide
the Company a competitive advantage, management believes that none of the
Company's other patents individually are significant to the business.

The Company holds trademarks for "Oshkosh," "Pierce," "McNeilus" and "MTM."
These trademarks are considered to be important to the future success of the
Company's business.

Quality Management

In 1994, Oshkosh commenced a program to educate and train all employees at
its Oshkosh facilities in quality principles and to seek ISO 9001 certification
to improve the Company's competitiveness in its global markets. Employees at all
levels of the Company are encouraged to understand customer and supplier
requirements, measure performance, develop systems and procedures to prevent
nonconformance with requirements and produce continuous improvement in all work
processes. Oshkosh achieved ISO 9001 certification in 1995 and Pierce achieved
ISO 9001 certification in April 1998. The Company is evaluating whether to
pursue ISO 9001 certification for McNeilus. Although management does not
consider such certification essential for McNeilus' domestic markets, the
Company may conclude it is valuable in marketing to certain international
customers.

Employees

As of September 30, 1998, the Company had approximately 3,500 employees, of
which approximately 1,300, 1300 and 900 employees are located at its principal
facilities in Oshkosh, Wisconsin, Appleton, Wisconsin and Dodge Center,
Minnesota, respectively. Production workers totaling approximately 800 employees
at the Company's Oshkosh facilities are represented by the United Auto Workers
union. The Company's five-year contract with the United Auto Workers union
extends through September 30, 2001. The Company believes its relationship with
employees is satisfactory.

Manufacturing

The Company manufactures trucks and truck bodies at ten manufacturing
facilities. Employee involvement is encouraged to improve production processes
and product quality. In order to reduce production costs, the Company maintains
a continuing emphasis on the development of proprietary components,
self-sufficiency in fabrication, just-in-time inventory management, improvement
in production flows, interchangeability and simplification of components among
product lines, creation of jigs and fixtures to ensure repeatability of quality
processes, utilization of robotics, and performance measurement to assure
progress toward cost reduction targets.

The Company intends to continue to upgrade its manufacturing capabilities
by adopting best practices across its manufacturing facilities, relocating
manufacturing activities to the most efficient facility, investing in further
fixturing and robotics, re-engineering manufacturing processes and adopting lean
manufacturing management practices across all facilities.

The Company is drawing upon its recent experience with the Pierce
acquisition in integrating the McNeilus manufacturing facilities. Within the
first year following the Pierce acquisition, the Company consolidated three
Pierce manufacturing facilities down to two while increasing Pierce's capacity
by improving product flow. In addition, among other things, the Company reduced
the number of operating shifts at the Pierce paint plant from three to one to
substantially reduce utility costs, implemented indexing of production lines and
relocated chassis frame build-up to Oshkosh to improve production efficiencies,
and eliminated storage rooms to relocate inventory to point of use thereby
eliminating duplicate material handling. Likewise, at McNeilus, the Company has
installed additional robots, commenced re-arrangement of weld and mount
activities and developed plans to expand paint capacity in order to improve
production facilities, all in the first seven months following the acquisition.

Item 2. PROPERTIES

Management believes the Company's equipment and buildings are modern, well
maintained and adequate for its present and anticipated needs. As of September
30, 1998, the Company operated in ten manufacturing plants. In addition, the
Company maintains

12

twelve distribution centers throughout the United States and
four sales offices internationally. The Company's manufacturing plants include:

Approximate
Square Footage Principal
Location (# of facilities) Owned Leased Products Manufactured

Oshkosh, Wisconsin(3).... 688,000 Defense Trucks; Front-Discharge Mixers;
Snow removal Vehicles; ARFF Vehicles
Appleton, Wisconsin(2)... 589,000 19,000 Fire Apparatus
Rear-Discharge Mixers; Refuse Truck
Dodge Center, Minnesota(1) 604,000 Bodies
Bradenton, Florida(1).... 287,000 Defense Trucks;
Riceville, Iowa(1)....... 108,000 Components for Rear-Discharge Mixers and
refuse Truck Bodies
Kensett, Iowa(1)......... 65,000 Not currently in use
McIntire, Iowa(1)........ 28,000 Components for Rear-Discharge Mixers and
Refuse Truck Bodies
Weyauwega, Wisconsin(1).. 28,000 Refurbished Fire Apparatus

The Company's facilities are pledged as collateral under the terms of the
Senior Credit Facility.

The Company's manufacturing facilities generally operate five days per week
on one shift, except for one-week shutdowns in July and December. Management
believes the Company's manufacturing capacity could be approximately doubled
with limited capital spending by working an additional shift at each facility.

Item 3. LEGAL PROCEEDINGS

The Company is engaged in litigation against Super Steel Products
Corporation ("SSPC"), the Company's former supplier of mixer systems for
forward-discharge concrete mixer trucks under a long-term supply contract. SSPC
sued the Company in state court claiming the Company breached the contract. The
Company counterclaimed for repudiation of contract. On July 26, 1996, a jury
returned a verdict for SSPC awarding damages totaling $4.5 million. On October
10, 1996, the state court judge overturned the verdict against the Company,
granted judgment for the Company on its counterclaim, and ordered a new trial
for damages on the Company's counterclaim. Both SSPC and the Company appealed
the state court judge's decision. On December 8, 1998, the Wisconsin Court of
Appeals ordered a state court judge to reinstate the jury verdict against the
Company awarding damages totaling approximately $4.5 million plus interest to
SSPC. The Company intends to petition for review of this decision by the
Wisconsin Supreme Court. The outcome of this matter cannot be predicted at the
present time. At September 30, 1998, the Company does not have a reserve
relating to this matter.

The Company was engaged in the arbitration of certain disputes between the
Oshkosh Florida Division and O.V. Containers, Inc. ("OV"), which arose out of
the performance of a contract to deliver 690 skeletal container chassis. The
Company contested warranty and other claims made against it, and reached a
settlement in June 1998, which included payment by the Company of $1 million to
OV.

As part of its routine business operations, the Company disposes of and
recycles or reclaims certain industrial waste materials, chemicals and solvents
at third party disposal and recycling facilities that are licensed by
appropriate governmental agencies. In some instances, these facilities have been
and may be designated by the United States Environmental Protection Agency
("EPA") or a state environmental agency for remediation. Under Comprehensive
Environmental Response, Compensation, and Liability Act (the "Superfund" law or
"CERCLA") and similar state laws, each potentially responsible party ("PRP")
that contributed hazardous substances may be jointly and severally liable for
the costs associated with cleaning up the site. Typically, PRPs negotiate a
resolution with the EPA and/or the state environmental agencies. PRPs also
negotiate with each other regarding allocation of the cleanup cost.

As to one such Superfund site, Pierce is one of 414 PRPs participating in
the costs of addressing the site and has been assigned an allocation share of
approximately 0.04%. Currently a remedial investigation/feasibility study is
being completed, and as such, an estimate for the total cost of the remediation
of this site has not been made to date. However, based on estimates and the
assigned allocations, the Company believes its liability at the site will not be
material and its share is adequately covered through reserves established by the
Company at September 30, 1998. Actual liability could vary based on results of
the study, the resources of other PRPs and the Company's final share of
liability.

The Company is addressing a regional trichloroethylene ("TCE") groundwater
plume on the south side of Oshkosh, Wisconsin. The Company believes there may be
multiple sources in the area. TCE was detected at the Company's North Plant
facility with recent testing showing the highest concentrations in a monitoring
well located on the upgradient property line. Because the investigation process
is still ongoing, it is not possible for the Company to estimate its long-term
total liability associated with this issue at this time. Also, as part of the
regional TCE groundwater investigation, the Company conducted a groundwater
investigation of a former landfill

13

located on Company property. The landfill, acquired by the Company in 1972, is
approximately 2.0 acres in size and is believed to have been used for the
disposal of household waste. Based on the investigation, the Company does not
believe the landfill is one of the sources of the TCE contamination. Based upon
current knowledge, the Company believes its liability associated with the TCE
issue will not be material and is adequately covered through reserves
established by the Company at September 30, 1998. However, this may change as
investigations proceed by the Company, other unrelated property owners, and
government entities.

The Company is subject to other environmental matters and legal proceedings
and claims, including patent, antitrust and state dealership regulation
compliance proceedings. Although the final results of all such claims cannot be
predicted with certainty, management believes that the ultimate resolution of
all claims, after taking into account the liabilities accrued with respect to
such claims, will not have a material adverse effect on the Company's financial
condition or results of operations. Actual results could vary, among other
things, due to the uncertainties involved in litigation.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended September 30, 1998.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information as of November 15, 1998
concerning the Company's executive officers and other officers. All of the
Company's officers serve terms of one year and until their successors are
elected and qualified.

Name Age Title
-------------------------- ----------------------------------

Robert G. Bohn............ 45 President and Chief Executive Officer
Timothy M. Dempsey........ 58 Executive Vice President, General Counsel and Secretary
Paul C. Hollowell......... 57 Executive Vice President and President, Defense
Business
Dan J. Lanzdorf........... 50 Executive Vice President and President, McNeilus Companies, Inc.
John W. Randjelovic....... 54 Executive Vice President and President, Pierce
Manufacturing, Inc.
Charles L. Szews.......... 42 Executive Vice President and Chief Financial
Officer
Matthew J. Zolnowski...... 45 Executive Vice President, Corporate
Administration, Strategic Planning and Marketing
J. David Brantingham...... 40 Vice President, Information Systems
Fred C. Fielding.......... 64 Vice President, Government Operations, Washington
D.C.Office
Ted Henson................ 47 Vice President, International Sales
Mark A. Meaders........... 40 Vice President, Corporate Purchasing and Logistics
Scott L. Ney.............. 47 Vice President and Treasurer
Thomas J. Polnaszek....... 42 Vice President and Controller
Donald H. Verhoff......... 52 Vice President, Technology
James D. Voss............. 57 Vice President, Human Resources

Robert G. Bohn. Mr. Bohn joined the Company in 1992 as Vice
President-Operations. He was appointed President and Chief Operating Officer in
1994. He was appointed President and Chief Executive Officer in October 1997.
Prior to joining the Company, Mr. Bohn was Director-European Operations for
Johnson Controls, Inc., Milwaukee, Wisconsin, which manufactures, among other
things, automotive products. He worked for Johnson Controls from 1984 until
1992. He was elected a Director of the Company in June 1995.

Timothy M. Dempsey. Mr. Dempsey joined the Company in October 1995 as Vice
President, General Counsel and Secretary. Mr. Dempsey has been and continues to
be a partner in the law firm of Dempsey, Magnusen, Williamson and Lampe in
Oshkosh, Wisconsin.

Paul C. Hollowell. Mr. Hollowell joined the Company in April 1989 as Vice
President-Defense Products and assumed his present position in February 1994.

Dan J. Lanzdorf. Mr. Lanzdorf joined the Company in 1973 as a design
engineer and has served in various assignments including Chief Engineer --
Defense, Director of Defense Engineering, Director of the Defense Business unit,
and Vice President of Manufacturing prior to assuming his current position in
September 1998.

14

John W. Randjelovic. Mr. Randjelovic joined the Company in October 1992 as
Vice President and General Manager in charge of the Bradenton, Florida Division.
In September 1996, he was appointed Vice President of Manufacturing, Purchasing,
and Materials for Pierce and assumed his present position in October 1997.

Charles L. Szews. Mr. Szews joined the Company in March 1996 as Vice
President and Chief Financial Officer and assumed his present position in
October 1997. Mr. Szews was previously employed by Fort Howard Corporation, a
manufacturer of tissue products, from June 1988 until March 1996 in various
positions, including Vice President and Controller from September 1994 until
March 1996.

Matthew J. Zolnowski. Mr. Zolnowski joined the Company as Vice
President-Human Resources in January 1992 and assumed his present position in
September 1998.

J. David Brantingham. Mr. Brantingham joined the Company in April 1995 as
Manager of Technical Services and assumed his present position in November 1997.
Mr. Brantingham was previously employed by Western Publishing, Inc., a printer
and publisher of children's books and a manufacturer of adult games, in various
positions including Director of Technical Services from May 1989 through April
1995.

Fred C. Fielding. Mr. Fielding joined the Company in October 1989 and
assumed his present position in January 1991.

Ted Henson. Mr Henson joined the Company in January 1990 as Contract
Specialist and assumed his current position in September 1998. Prior to joining
the Company, Mr. Henson served in the U.S. Army, most recently as Brigade
Commander Sargent Major.

Mark A. Meaders. Mr. Meaders joined the Company as Director of Purchasing
for Pierce in September 1996 and assumed his present position as Vice
President-Corporate Purchasing and Logistics in November 1997. Prior to joining
the Company, Mr. Meaders was Vice President-Purchasing for the CA Short Co.,
Inc., a provider of premium incentives, from 1995 until joining Pierce. Mr.
Meaders began his career at the Company's former Chassis Division as the plant
manager from 1993-1995. He previously served 13 years in the U.S. Army and
departed after attaining the rank of Major.

Scott L. Ney. Mr. Ney joined the Company in May 1973 as Credit Manager. He
served as Treasurer prior to assuming his present position in September 1998.

Thomas J. Polnaszek. Mr. Polnaszek joined the Company in January 1998 as
Corporate Controller and assumed his present position in September 1998. Mr.
Polnaszek was previously employed by Wisconsin Pharmacal Company, Inc., a
consumer products manufacturer and marketer, from July 1991 to January 1998 as
Vice President - Finance and Chief Financial Officer.

Donald H. Verhoff. Mr. Verhoff joined the Company in May 1973 as a
development engineer. He has held positions as Manager of the Test Lab, and
Director of New Product Development prior to assuming his present position in
November 1997.

James D. Voss. Mr. Voss joined the Company in March 1992 as Director of
Human Resources. Prior to joining the Company, Mr. Voss was employed by the
University of Wisconsin as Human Resource Coordinator. Mr. Voss assumed his
present position in September 1998.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

The information under the captions "Financial Highlights" and Notes 7 and
12 to the Consolidated Financial Statements contained in the company's Annual
Report to Shareholders for the fiscal year ended September 30, 1998, is hereby
incorporated by reference in answer to this item.

In July 1995, the company's board of directors authorized the repurchase of
up to 1,000,000 shares of Common Stock. As of December 17, 1998, the Company has
repurchased 461,535 shares under this program at a cost of $6.6 million.

15

Item 6. SELECTED FINANCIAL DATA.

The information under the caption "Financial Highlights" contained in the
company's Annual Report to Shareholders for the fiscal year ended September 30,
1998, is hereby incorporated by reference in answer to this item.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

The information under the caption "Management's Discussion and Analysis of
Consolidated Financial Condition and Results of Operations" contained in the
company's Annual Report to Shareholders for the fiscal year ended September 30,
1998, is hereby incorporated by reference in answer to this item.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information under the caption "Management's Discussion and Analysis of
Consolidated Financial Condition and results of Operation - Market Risk"
contained in the company's Annual Report to Shareholders for the fiscal year
ended September 30, 1998, is hereby incorporated by reference in answer to this
item.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements set forth in the company's Annual Report to
Shareholders for the fiscal year ended September 30, 1998, are hereby
incorporated by reference in answer to this item. Data regarding quarterly
results of operations included in Note 12 to the Consolidated Financial
Statements contained in the Company's Annual Report to Shareholders for the
fiscal year ended September 30, 1998, is hereby incorporated by reference.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.

None.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information under the captions "Election of Directors" and "Section
16(a) Beneficial Ownership Reporting Compliance" of the company's definitive
proxy statement for the annual meeting of shareholders on February 1, 1999, as
filed with the Securities and Exchange Commission, is hereby incorporated by
reference in answer to this item. Reference is also made to the information
under the heading "Executive Officers of the Registrant" included under Part I
of this report.

Item 11. EXECUTIVE COMPENSATION.

The information under the captions "Executive Compensation" contained in
the company's definitive proxy statement for the annual meeting of shareholders
on February 1, 1999, as filed with the Securities and Exchange Commission is
hereby incorporated by reference in answer to this item.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information under the caption "Shareholdings of Nominees and Principal
Shareholders" contained in the company's definitive proxy statement for the
annual meeting of shareholders on February 1, 1999, as filed with the Securities
and Exchange Commission, is hereby incorporated by reference in answer to this
item.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information contained under the captions "Election of Directors" and
"Certain Transactions" contained in the company's definitive proxy statement for
the annual meeting of shareholders on February 1, 1999, as filed with the
Securities and Exchange Commission, is hereby incorporated by reference in
answer to this item.

16

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) 1. Financial Statements: The following consolidated financial
statements of the company and the report of independent auditors included in the
Annual Report to Shareholders for the fiscal year ended September 30, 1998, are
incorporated by reference in Item 8:

Report of Ernst & Young LLP, Independent Auditors
Consolidated Statements of Income (Loss) for the years ended September
30, 1998, 1997, and 1996 Consolidated Balance Sheets at September 30,
1998, and 1997 Consolidated Statements of Shareholders' Equity for the
years ended September 30, 1998, 1997, and 1996. Consolidated Statements
of Cash Flows for the years ended September 30, 1998, 1997, and 1996
Notes to Consolidated Financial Statements

2.Financial Statement Schedules:

Schedule II - Valuation & Qualifying Accounts

All other schedules are omitted because they are not applicable, or the
required information is included in the consolidated financial
statements or notes thereto.

3. Exhibits:

2.1 Stock Purchase Agreement by and among McNeilus
Companies, Inc., the shareholders of McNeilus
Companies, Inc., and Oshkosh Truck Corporation dated
December 8, 1997 (incorporated by reference to
Exhibit 2.1 to the Company's Annual Report on Form
10-K for the year ended September 30, 1997 (File No.
0-13886)).
2.2 First Amendment to Stock Purchase Agreement dated
February 26, 1998, by and among McNeilus Companies,
Inc., the shareholders of McNeilus Companies, Inc.
and Oshkosh Truck Corporation (incorporated by
reference to Exhibit 2.2 to the Company' Current
Report on Form 8-K dated February 26, 1998 (File No.
0-13886)).
3.1 Restated Articles of Incorporation of Oshkosh Truck
Corporation (incorporated by reference to Exhibit
3.1 to the Company's Annual Report on Form 10-K for
the year ended September 30, 1997 (File No.
0-13886)).
3.2 By-Laws of Oshkosh Truck Corporation, as amended
(incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-4 (Reg.
No. 333-47931)).
4.1 Credit Agreement dated February 26, 1998, among
Oshkosh Truck Corporation, Bank of America National
Trust and Savings Association, as Agent and as Swing
Line Lender, and certain other financial
institutions (incorporated by reference to Exhibit
4.1 to the Company's Current Report on Form 8-K
dated February 26, 1998 (File No. 0-13886)).
4.2 Indenture dated February 26, 1998, among Oshkosh
Truck Corporation, the Subsidiary Guarantors and
Firstar Trust Company (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form
8-K dated February 26, 1998 (File No. 0-13886)).
4.3 Form of 8 3/4% Senior Subordinated Note due 2008
(incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form S-4 (Reg.
No. 333-47931)).
4.4 Form of Note Guarantee (incorporated by reference to
Exhibit 4.4 to the Company's Registration Statement
on Form S-4 (Reg. No. 333-47931)).
10.1 1990 Incentive Stock Plan for Key Employees, as
amended, subject to shareholder approval at the
Company's 1999 Annual Meeting of Shareholders.*

17

10.2 1994 Long-Term Incentive Compensation Plan dated
March 29, 1994 (incorporated by reference to Exhibit
10.12 to the Company's Annual Report on Form 10-K
for the year ended September 30, 1994) (File No.
0-13886)).*
10.3 Form of Key Employees Employment and Severance
Agreement with Messrs. R.G. Bohn, T.M. Dempsey, P.C.
Hollowell, C.L. Szews, and M.J. Zolnowski
(incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the year
ended September 30, 1994 (File No. 0-13886)).*
10.4 Employment Agreement with P.C. Hollowell, Executive
Vice President (incorporated by reference to Exhibit
10.10 to the Company's Annual Report on Form 10-K
for the year ended September 30, 1997 (File No.
0-13886)).*
10.5 Form of Oshkosh Truck Corporation 1990 Incentive
Stock Plan, as amended, Nonqualified Stock Option
Agreement (incorporated by reference to Exhibit 4.2
to the Company's Registration Statement on Form S-8
(Reg. No. 33-6287)).*
10.6 Form of Oshkosh Truck Corporation 1990 Incentive
Stock Plan, as amended, Nonqualified Director Stock
Option Agreement (incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement
on Form S-8 (Reg. No. 33-6287)).*
10.7 Form of 1994 Long-Term Incentive Compensation Plan
Award Agreement (incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form
10-K for the year ended September 30, 1995 (File No.
0-13886)).*
10.8 Stock Purchase Agreement, dated April 26, 1996,
among Oshkosh Truck Corporation, J. Peter Mosling,
Jr. and Stephen P. Mosling, and consented to by R.
Eugene Goodson (incorporated by reference to Exhibit
10.17 to the Company's Annual Report on Form 10-K
for the year ended September 30, 1996 (File No.
0-13886)).
10.9 Employment Agreement dated as of October 15, 1998,
between Oshkosh Truck Corporation and Robert G.
Bohn.*
10.10 Letter Agreement dated as of June 5, 1998, between
Oshkosh Truck Corporation and R. Eugene Goodson.*
10.11 Employment Agreement with R. E. Goodson as of April
16, 1992 (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended
September 30, 1992 (File No. 0-13886)).*
11. Computation of per share earnings (contained in Note
1 of "Notes to Consolidated Financial Statements" of
the Company's Annual Report to Shareholders for the
fiscal year ended September 30, 1998).
13. 1998 Annual Report to Shareholders, to the extent
incorporated herein by reference.
21. Subsidiaries of Registrant.
23. Consent of Ernst & Young LLP
27. Financial Data Schedule

*Denotes a management contract or compensatory plan or arrangement.

(b) The company was not required to file a report on Form 8-K during the
quarter ended September 30, 1998.

18

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

OSHKOSH TRUCK CORPORATION

December 17, 1998 By /S/ Robert G. Bohn
------------------------------------------
Robert G. Bohn, President and Chief
Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities on the dates indicated.

December 17, 1998 /S/ R. G. Bohn
----------------------------------------------
R. G. Bohn, President and Chief Executive Officer

(Principal Executive Officer)

December 17, 1998 /S/ C. L. Szews
------------------------------------------------------
C. L. Szews, Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)

December 17, 1998 /S/ T. J. Polnaszek
------------------------------------------------------
T. J. Polnaszek, Vice President and Controller
(Principal Accounting Officer)

December 17, 1998 /S/ J. W. Andersen
------------------------------------------------------
J. W. Andersen, Director

December 17, 1998 /S/ D. T. Carroll
------------------------------------------------------
D. T. Carroll, Chairman

December 17, 1998 /S/ General F. M. Franks, Jr.
------------------------------------------------------
General F. M. Franks, Jr., Director

December 17, 1998 /S/ M. W. Grebe
------------------------------------------------------
M. W. Grebe, Director

December 17, 1998 /S/ K. J. Hempel
------------------------------------------------------
K. J. Hempel, Director

December 17, 1998 /S/ S. P. Mosling
------------------------------------------------------
S. P. Mosling, Director

December 17, 1998 /S/ J. P. Mosling, Jr.
------------------------------------------------------
J. P. Mosling, Jr., Director

December 17, 1998 /S/ R. G. Sim
------------------------------------------------------
R. G. Sim, Director

19

SCHEDULE II

OSHKOSH TRUCK CORPORATION
VALUATION AND QUALIFYING ACCOUNTS

Years Ended September 30, 1998, 1997, and 1996
(In Thousands)

Balance at Purchase of Additions
Beginning of Pierce and Charged to Balance at
Classification Year McNeilus Expense Reductions* End of Year
-------------- ---- -------- ------- ---------- -----------
Receivables -
Allowance for doubtful accounts:

1996 $477 $509 $182 $(102) $1,066
==== ==== ==== ====== ======
1997 $1,066 --- $881 $23 $1,970
====== === ==== ==== ======
1998 $1,970 $173 $124 $(199) $2,068
====== ==== ==== ====== ======

* Represents amounts written off to the reserve, net of recoveries.

20

INDEX TO EXHIBITS

3. Exhibits:

2.1 Stock Purchase Agreement by and among McNeilus Companies,
Inc., the shareholders of McNeilus Companies, Inc., and
Oshkosh Truck Corporation dated December 8, 1997 (incorporated
by reference to Exhibit 2.1 to the Company's Annual Report on
Form 10-K for the year ended September 30, 1997 (File No.
0-13886)).
2.2 First Amendment to Stock Purchase Agreement dated February 26,
1998, by and among McNeilus Companies, Inc., the shareholders
of McNeilus Companies, Inc. and Oshkosh Truck Corporation
(incorporated by reference to Exhibit 2.2 to the Company'
Current Report on Form 8-K dated February 26, 1998 (File No.
0-13886)).
3.1 Restated Articles of Incorporation of Oshkosh Truck
Corporation (incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year ended
September 30, 1997 (File No. 0-13886)).
3.2 By-Laws of Oshkosh Truck Corporation, as amended (incorporated
by reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-4 (Reg. No. 333-47931)).
4.1 Credit Agreement dated February 26, 1998, among Oshkosh Truck
Corporation, Bank of America National Trust and Savings
Association, as Agent and as Swing Line Lender, and certain
other financial institutions (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K dated
February 26, 1998 (File No. 0-13886)).
4.2 Indenture dated February 26, 1998, among Oshkosh Truck
Corporation, the Subsidiary Guarantors and Firstar Trust
Company (incorporated by reference to Exhibit 4.2 to the
Company's Current Report on Form 8-K dated February 26, 1998
(File No. 0-13886)).
4.3 Form of 8 3/4% Senior Subordinated Note due 2008 (incorporated
by reference to Exhibit 4.3 to the Company's Registration
Statement on Form S-4 (Reg. No. 333-47931)).
4.4 Form of Note Guarantee (incorporated by reference to Exhibit
4.4 to the Company's Registration Statement on Form S-4 (Reg.
No. 333-47931)).
10.1 1990 Incentive Stock Plan for Key Employees, as amended,
subject to shareholder approval at the Company's 1999 Annual
Meeting of Shareholders.*
10.2 1994 Long-Term Incentive Compensation Plan dated March 29,
1994 (incorporated by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the year ended
September 30, 1994) (File No. 0-13886)).*
10.3 Form of Key Employees Employment and Severance Agreement with
Messrs. R.G. Bohn, T.M. Dempsey, P.C. Hollowell, C.L. Szews,
and M.J. Zolnowski (incorporated by reference to Exhibit 10.13
to the Company's Annual Report on Form 10-K for the year ended
September 30, 1994 (File No. 0-13886)).*
10.4 Employment Agreement with P.C. Hollowell, Executive Vice
President (incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the year ended
September 30, 1997 (File No. 0-13886)).*
10.5 Form of Oshkosh Truck Corporation 1990 Incentive Stock Plan,
as amended, Nonqualified Stock Option Agreement (incorporated
by reference to Exhibit 4.2 to the Company's Registration
Statement on Form S-8 (Reg. No. 33-6287)).*
10.6 Form of Oshkosh Truck Corporation 1990 Incentive Stock Plan,
as amended, Nonqualified Director Stock Option Agreement
(incorporated by reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-8 (Reg. No.33-6287)).*
10.7 Form of 1994 Long-Term Incentive Compensation Plan Award
Agreement (incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the year ended
September 30, 1995 (File No. 0-13886)).*

21

10.8 Stock Purchase Agreement, dated April 26, 1996, among Oshkosh
Truck Corporation, J. Peter Mosling, Jr. and Stephen P.
Mosling, and consented to by R. Eugene Goodson (incorporated
by reference to Exhibit 10.17 to the Company's Annual Report
on Form 10-K for the year ended September 30, 1996 (File No.
0-13886)).
10.9 Employment Agreement dated as of October 15, 1998, between
Oshkosh Truck Corporation and Robert G. Bohn.*
10.10 Letter Agreement dated as of June 5, 1998, between Oshkosh
Truck Corporation and R. Eugene Goodson.*
10.11 Employment Agreement with R. E. Goodson as of April; 16, 1992
(incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended September 30, 1992 (File No.
0-13886)).*
11. Computation of per share earnings (contained in Note 1 of
"Notes to Consolidated Financial Statements" of the Company's
Annual Report to Shareholders for the fiscal year ended
September 30, 1998).
13. 1998 Annual Report to Shareholders, to the extent incorporated
herein by reference.
21. Subsidiaries of Registrant.
23. Consent of Ernst & Young LLP
27. Financial Data Schedule

*Denotes a management contract or compensatory plan or arrangement.

22