PURPOSE, INC.

Michael Young:

Welcome to the Purpose, Inc., the podcast where we discuss corporate purpose and stakeholder capitalism. I'm your host, Michael Young.

My guest today is Kevin Tubbs. He is Vice President and Chief Ethics Compliance and Sustainability Officer at Oshkosh Corporation. And if you don't know Oshkosh, it's a 100-year-old company, and you definitely know its products. The company makes the vehicles you see every day and that we could not live without, vehicles that serve the everyday heroes, fire, military, tow trucks, waste collection, and boom lifts, equipment that allows people to work safely at height. Kevin oversees the company's environmental and sustainability programs across a global team of 15,000 employees worldwide. Oshkosh focuses on empowering people, developing innovative products, and building communities and operating sustainably. And one of the reasons I wanted to talk to Kevin is because the company has an impressive track record for environmental sustainability, for treating people fairly, and for doing the right thing. The company's been a leader in reducing its energy consumption, investing in technology to improve its products, cutting its waste streams to landfills. And interestingly, and I want to get into this in our talk today, Oshkosh is a leader in EV technology for some of those vehicle types that I just mentioned, in developing the next generation of electric vehicles and is piloting and pioneering EV fire trucks which are already in service and going on rescue calls. Kevin works closely with the investor relations team at Oshkosh, and under Kevin's leadership and work, Oshkosh has been named to Barron's 100 Most Sustainable Companies, and it has been included in the S&P Global Sustainability Yearbook for the past four years. Kevin, thank you for coming on the podcast.

Kevin Tubbs:

Michael, it's my pleasure. Thanks for having me and thanks for your interest in Oshkosh. We really appreciate it.

Michael Young:

You bet, you bet. So let's dive in here. Maybe just a quick couple of minutes on what brought you to the company and your role.

Kevin Tubbs:

Sure. Well, it actually wasn't the attraction to the weather in Wisconsin, at least not in the wintertime, but rather Oshkosh is a great company, as you mentioned. It's a 100-year-old company that I think has a true purpose, and I think that it kind of resonates when I'm talking to you and all the work you do around purpose that I think what attracted me first to Oshkosh was our purpose. And that being that we look to make a difference in people's lives, in the lives of the everyday hero as we like to say in the vehicles that we make, whether it's military vehicles to keep the war fighter safe or, as you mentioned, vehicles that help people work safely at height or fire trucks for our fire and rescue people, all these kind of things. We make really cool products really cool, big products that help those people give us the lifestyle that that we really want and need as a world. And when I came to Oshkosh in 2012, it was with the purpose of turning the company from a company that had environmental as looking at environmental compliance. And we had a very good compliance record as a company, but looking at sustainability in a broader context. And how can we look at our environmental footprint and look to minimize it? How can we look at, as you mentioned, the waste that we use, the energy that we use, understand where it's coming from and really look to turn some things around that way and make sure we're minimizing that? How can we look at things we're doing around social responsibility, things around governance? And really put together a consolidated approach to ESG or sustainability. And it was a great company already doing great things, had a reputation that was second to none in a lot of segments, had products that were leading products. And so I thought the mix of a good company looking to become a great company, a culture that was built on people first and doing the right thing, and wanted to put together a more formal sustainability program was something that really attracted me to Oshkosh.

Michael Young:

Yeah, great. And maybe, Kevin, why don't we just get into and unpack the values that that Oshkosh has lived by and has driven the company's success for the past 100 years.

Kevin Tubbs:

Sure. Well, I was listening to one of your podcasts recently, Michael, when you were talking to Bruce Simpson and McKinsey. I know one of the points that he made was that ESG without purpose is pretty much a group of metrics, that you really needed purpose. So first, we have the purpose that I mentioned which was making a difference in people's lives. And on top of that, we have at Oshkosh our four core values which really has shepherded the company through its many phases. And the four are we put people first. And we really do try to do that and mean that, whether that means that we are sensitive to the needs of the communities where we operate where we try to educate our people and help our people advance in their careers or just basically treating people with respect in the way that they want to be treated. But we do try to put people first above everything that we do. The second thing is that we do the right thing, and that's where a lot of the environmental part of this sustainability journey comes in about doing the right thing for the communities that we operate, doing the right thing around our planet and our resources. We persevere. We're a 100-year-old company, and we've been through a lot of economic downturns, ups and downs. We've been through now the pandemic and those type of things. But persevere. And then we're better together is our fourth value. And sustainability in ESG is not just a small group of people or people that are in the group or section that may have sustainability in their title. But in order to really embed this in our culture and throughout the organization, I work, as you say, with whether it's the investor relations folks or our risk management department, our finance people, our supply chain people certainly, the people that are responsible for product safety and product development. It takes all of these people if you're really looking at putting together an ESG or sustainability culture in an organization. And so a lot of the things that we do around ESG all tie back to our core values and all are very consistent with the our core I guess you could say Midwestern-born core values that we have as a company. And so it makes it kind of almost natural to be working on ESG type of activities here in a company like Oshkosh.

Michael Young:

Yeah, that's great. And Kevin, when we spoke, I want to come back, start at people first, you mentioned as a company, you were out of the office at the beginning of the pandemic for a very short time. And given just your global footprint and your workforce and the fact that you are in manufacturing, how did you pull that off? And talk about, if you would, some of the things that you learned and the best practices that came out of that process and that journey.

Kevin Tubbs:

Well, that's a good question, Michael. Of course, a number of our businesses are what were viewed and referred to as essential businesses, whether that was making military vehicles or making fire and emergency vehicles. The type of things we had both our customers and the government regulators considered our businesses as essential. So we needed to continue to operate. We needed to continue to deliver for the customers. So our people, our operations staffs, our safety people did yeoman's effort increasing cleaning frequencies, getting materials to do the work that they needed to do. Kind of an interesting story is here in Wisconsin, we partnered with a local brewery to get alcohol-based wipes and cleaning materials from some materials that were byproducts from their processes where we necessarily couldn't get other more conventional cleaning materials so we needed to have some of the disinfectants. So we did a lot of work to try to keep people as safe as we could. We looked at our processes, saw where could we distance people to build social distancing into the process. So a lot of work to keep the businesses, going keep the materials flowing.

At the same time in our global headquarters here in Oshkosh, there was a strong feeling that if people could be back working on the plant floor, that we needed to do what we could to make sure we were we were supporting them. And so there were a number of different things we did. Certainly, we learned a lot about working remotely and what we could and couldn't do remotely. And we've gone to more of a hybrid model than we had before. But at the same time, we brought back quite a few people to our operations, our global headquarters after just several months being out of the headquarters. But we did it in a way that we believe was a safe way to do it and our record bears that out. We increased our social distancing. We decreased the amount of people that could be in any one room at any one time. We implemented masking procedures, and we put an on-site testing location on our location here. And one I think of the keys to making it work was that the leadership here walked the walk in addition to talking the talk. If you saw our CEO or you saw other leaders, you saw them following the protocols that were laid out. If it was masking, if it was distancing, if it was minimizing the number of people in an elevator or on a staircase, they were leading by example, and they were doing what we were asking other people to do. So we thought that was also very important for us. So we did that for the people that were here, but we also instructed our leaders that we wanted our leaders to have more flexibility with their workforce. So we wanted to be sensitive to people's needs, people that needed to have time for homeschooling of their children, people that needed to have some additional time because of taking care of someone who might have been sick. So we tried to make sure we were listening to our people, listening to what their needs were, and as best that we could, making adjustments to our work schedules, to our work requirements to be sensitive to the needs of our team members so that they could do their best work and still deal with the different challenges that the pandemic threw their way. So it was a whole learning experience for all of us, and I think we've come out of it a stronger company and a more together company as we continue to move forward.

Michael Young:

And just staying on the people's side for a second, Kevin, talk a little bit about technical education. And I think we hear often times that there's a gap between, there are a lot of advanced manufacturing and high skilled jobs that are out there, but there's a gap in talent. And so how are you as an organization helping close that gap from a technical education standpoint and building the next generation of workers? And talk about that, if you would.

Kevin Tubbs:

Sure. So Michael, there's a number of things we're doing throughout our organization when it comes to education and it comes to team members. And as you say, there's certainly a war for talent if you will, and there's a lot of people doing a lot of different things to deal with that. And so I guess I'll start, we start at a young age. A lot of our engineering team spends time in the community with children as young as middle school children, working with them on STEM type programs, science, technology, engineering, math programs, whether it's robotics, whether it's computers. And they're in the schools, they're seeing people whether they're Oshkosh people or people from JLG or Pierce, some of our other businesses. But they're seeing them early on. Then those young people go to high school, we in a number of our operations have apprentice programs that we've launched with the high schools. For example, our Pierce facility in Appleton, Wisconsin has a program with the local technical academy where they have apprentices come in and they spend typically four hours a day working with us, getting school credit for the work that they do, whether that be in welding or other activities that they do there. And then they are offered a job converted to full-time when they get out of high school. And I realized that approximately 11 out of our 20 previous apprentices that we had there have been converted into full-time employees. We do the same thing in our JLG operations in Pennsylvania where students begin in September, and they're hired on. They train four hours a day, Monday through Friday supervised by a schoolteacher. Those students receive school credit toward graduation from their time, and they're provided a mentor from our company. And then they're offered, again, full-time employment afterwards.

So we're doing that in a number of areas with local high schools. We also have very robust programs with a number of universities where we provide during a year hundreds of internships across the company where we have students come in and work. And I think what we pride ourselves in from an internship program is they're not just filing or doing something that's not meaningful. We give them meaningful, educational work for our interns to do and have a good track record again there of converting people from student interns to full-time workers in our locations. Another thing that I think is somewhat unique is that we try to train our internal people and our wage workforce for a role that may be a little more challenging than the role that they came into. For example, again, back to our Pierce fire truck manufacturing operations in Wisconsin, we have a program to train electricians. And so we will take some of our assemblers who are interested in becoming electricians, and we'll put them in an in-house training program. And they will then able to work and learn that trade of electrician. And we've been very successful in being able to build electricians through that program instead of trying to go out in a very difficult job market and hire some people as electricians. So those are some examples of some of the things that we're doing to try to improve the skill levels in our workforce and help close that skills gap that we're all too familiar with.

Michael Young:

Yeah, building pipeline.

Kevin Tubbs:

Exactly. It’s all about building pipeline.

Michael Young:

Yeah, great. Okay. Dipping into sustainability, waste reduction, materials, landfill, zero emission vehicles, I want to hear about the fire truck. So let's get into just the whole kind of Oshkosh approach to sustainability and walk us through that if you would please.

Kevin Tubbs:

Sure. Well, of course, everybody's eyes light up when they see a fire truck. Fire trucks are very cool. So when I guess I’ll start with our with our manufacturing operations within our four walls. When we first started our sustainability journey here back in 2011/2012 and we were looking at what are material aspects of our operations where we can make a difference in the environment, two things that came up that were ubiquitous and that people could really get their arms around were our energy usage and our waste generation. We do use a lot of machines in our operations so we use a fair amount of electricity, fair amount of heating, whether that's for heating our buildings, whether that's energy used to cure paint, a lot of different things that we use. So we established goals around energy reduction and waste reduction, partnered with the US Department of Energy on their better plants program, and we've been successful. We've reduced since 2014 our overall energy use by, well, over 20%. And it's a lot of different kinds of projects. It's everything from, of course, lighting, LED lighting to things that we're doing around our compressors to making sure that we're winterizing and then putting in things like speed doors. We work with our local utilities and our local technical schools to help us with some of this. We've been quite successful so far. Here in Wisconsin, there's a program for businesses called Focus on Energy. A number of our operations have won their partner of the year for work that they do with them. So a lot on the energy side. We now also announced last year I believe it was that we've entered into a virtual power purchase agreement with a wind farm that's going to be starting up in Oklahoma by the end of this year, and that wind farm, the credits, the renewable energy certificates that will be generated by that wind farm will offset a substantial part of the fossil fuel generated electricity that our operations use. So that's one of our first forays into renewable energy. From a waste standpoint, we have been on a journey towards zero waste to landfill. Right now, well over 80% of our waste at all of our operations goes other than to landfill. We have four of our manufacturing facilities now are certified zero waste to landfill facilities with one in Dodge Center, Minnesota just becoming a platinum level true zero waste certified facility, the first one in the state of Minnesota that we're very proud of.

So a lot of work going on within our four walls. But outside of the four walls or from a product innovation standpoint, there's a lot of really cool stuff going on there also in all of our business units. We've introduced in the marketplace the first all-electric scissor lift in our JLG Access business which we call the Davinci. And the reason that that's cool is not just because it operates on battery power without using fossil fuels, but it also is obviously quieter, it doesn't have an odor that the diesel fuel product would have, and it doesn't have leaks even up and down, the controls are not based on hydraulics. It's all electric so it's really got some great applications for clean rooms and that type of thing in inner city applications. I'm sure you're aware that earlier this year as we discussed, we received the contract for the next generation delivery vehicle for the U.S. Postal Service, and that's a combination of internal combustion engine vehicles with battery electric vehicles. And one of the cool things about that is that the internal combustion engine vehicles will be able to in the future, if they would want to, convert them to electric vehicles as more of the charging infrastructure becomes available. So those will start to roll off the production line in 2023, replacing the familiar postal vehicles that we've all grown accustomed to seeing out there on our streets, which are quite old and quite inefficient and quite expensive to continue to maintain. So we're really excited that the fact that starting in 2023 and moving on forward, if people aren't familiar with Oshkosh now, you're going to see an Oshkosh product pull up in front of most, if not all, American residences and businesses starting at that time. So really, really great project for us there.

And then as far as the fire trucks, as you mentioned, we just earlier this year rolled out what we call the Volterra, which is the first electric fire truck in service, and it's in service in Madison, Wisconsin. It's been out on hundreds of calls already, doing great things out there. It's a pilot right now for us but one that we see tremendous growth for, one that we're getting a lot, it's got a lot of buzz in that industry, a lot of communities that have their own sustainability goals are looking for us to be able to produce this vehicle for them. And we really think the sky's the limit for the Volterra. It's a great product for us that we're starting here in Wisconsin, and you'll start to see rolled out. We also have a variant of that which is part of our airport rescue offering that we'll be able to be doing that in different airports for airport rescue vehicles. And you'll start to see it in some of our other business lines too, whether that's in refuse vehicles or mixers, a lot of work going on right now in those electrification technologies throughout Oshkosh Corporation.

Michael Young:

Great, great stuff. Maybe if we could end on, Kevin, just how you communicate this narrative to your stakeholders and shareholders. Those are important stakeholders. You've done a lot on the employee side, the community side, talking about what you do there. But maybe just give us a little bit about how you work with IR and how you address these issues to investors in particular.

Kevin Tubbs:

Well, that's an interesting question, Michael, because I think that one of the things I noted when I first came here is that Oshkosh was basically a humble company, a Midwest company, a company that lets actions speak louder than words and was somewhat I would say of a well-kept secret. We don't tend to go out and be very vocal about what we're doing. But at the same time, people want to know what you're doing. People want to understand what you're all about. We talked before about talent. Young people especially and others want to work for a company that cares about sustainability. Investors want to invest in a company that cares about sustainability. So we need to be able to be communicative about the kind of things that we're doing. So we certainly have a sustainability report as a lot of large companies do that we welcome anyone to take a look and see what we do as a company and go out to our website and see our sustainability report and our SASB report and TCFD and the different reports that we have. As you said, I meet quite frequently on a weekly basis with our Investor Relations Vice President, and I share with him information that I have and things that I've learned from a sustainability standpoint and what's happening in the world. And he shares with me concerns that our investment community has, and we offer our stakeholders and our shareholders discussion times with us. I've met with numerous shareholders over the course of the last year with him talking about our sustainability journey and talking about how that influences our company answering questions that that they might have. We've made some presentations together, and we'll continue to do that. So we try to tell that story about Oshkosh and the kind of things that we do, the kind of company we are, and make ourselves available to be able to do that on an outwardly facing basis. So I'm sure there's more we can do. We continue to build. Like others, we're on a journey. We're a lot better than we were in 2012. We're not the company that we will be 10 years from now. But that's what makes it exciting. We still see a lot of runway in front of us as we go down this journey in electrification and closer toward reduction in our energy and greenhouse gas emissions and waste and also, the things we do in the communities to make sure that we're a good community citizen. Our communities are better, we want all of our communities to be better because Oshkosh has an operation there. And I think with those kind of things in play, we've just got a lot of a lot of great things in front of us.

Michael Young:

Yeah, that's great. And wrapping it up here, Kevin, I think you mentioned something in your comments about how leadership walks the walk throughout, right? They demonstrate leadership. They don't just say they do. And that's really always refreshing and exciting to hear that it starts at the top, and those who are at the top see themselves as part of this journey as well. So it's great to hear that.

Kevin Tubbs:

Thank you. And I couldn't agree with you more. Without top leadership not only giving you that vocal support but without them also being visible and people seeing that they believe in this, we can't be as successful as we'd otherwise be. So I think that's a key part of this.

Michael Young:

Yeah, absolutely. Well, Kevin, we're going to have to leave it there unfortunately. Thank you so much for coming on the podcast today. I really appreciate it.

Kevin Tubbs:

Pleasure, Michael. Anytime. Thanks for the invitation.

Michael Young:

You got it.

Conclusion:

The Purpose, Inc. Podcast is a production of Actual Agency, helping innovators communicate in a changing world. More at www.Actual.Agency.

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