The Pentagon's decision to shift the production of Army trucks from Texas to Wisconsin after 17 years caught Texas' elected officials by surprise, raising questions about overconfidence, a loss of political clout and the impact of economic incentives provided to the winning company by Wisconsin's Democratic governor.
Texas Republican Gov. Rick Perry and the 34-member Senate-House delegation are rallying to salvage a deal for BAE Systems that could be worth $2.6 billion and sustain 10,000 direct and indirect jobs around the sprawling truck manufacturing plant in Sealy.
But as one Democratic operative puts it: "That's like having a party in the corral after all the horses have run out."
The 92-year-old Oshkosh Corp. undercut BAE Systems' bid by roughly 10 percent. The Wisconsin company had support by a predominantly Democratic congressional delegation that helped Barack Obama carry the state last November. And the truck builder reaped the benefits of state assistance crafted by Wisconsin Gov. Jim Doyle.
Elected officials in Texas assumed the contract would remain in their state, relied on networks of support built up during Republican control of the White House and Congress and did not provide BAE Systems any state assistance.
Katherine Cesinger, Perry's deputy press secretary, said BAE Systems "did not ask our office for any assistance prior to the recent decision."
"It sounds to me like complacency may be the biggest factor in Texas losing this contract," says political scientist Paul Light of New York University. "The Army made a decision to give the contract to the lowest bidder. If I were an elected official from Texas, I'd stop whining and start asking questions about why Texas didn't put up the dollars to help the company keep that contract."
The congressional watchdog, the Government Accountability Office, expects to decide by mid-December the outcome of BAE Systems' appeal of the Army decision. The contract calls for production of 23,000 trucks and trailers over the next five years, starting with manufacturing 2,568 trucks for $281 million.
"We are hopeful the government will reverse the decision in the interests of the U.S. military and the U.S. taxpayer," says BAE spokesman Michael Teegardin.
The setback for Texas illustrates just how far the state's political leverage has plummeted since Sen. Lloyd Bentsen, D-Houston, helped BAE's predecessor win the initial contract in 1991 under President George H.W. Bush, and Sens. Phil Gramm, R-College Station, and Kay Bailey Hutchison, R-Dallas, helped the company retain the contract in 2001 under President George W. Bush.
"We never saw this coming -- we were completely blindsided," says a top aide to Sen. John Cornyn, R-San Antonio, a former member of the Senate Armed Services Committee panel with jurisdiction over military vehicles.
Lawmakers and BAE officials alike felt "sucker punched," added David Davis, a top Hutchison aide. " 'Shocked' doesn't begin to describe it." 
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