United Auto Workers members overwhelmingly voted down a new five-year contract offer from Oshkosh Corp on Friday despite the company's offer of a signing bonus and raise to offset higher health care costs, according to the company.

The current contract, covering more than 3,000 employees in northeast Wisconsin, was set to expire at midnight.

A new contract proposal from Oshkosh was put on the table as the heavy vehicle maker faces uncertainty due to budget constraints at the Department of Defense, which is Oshkosh's biggest customer.

Oshkosh and the UAW -- its biggest union -- are expected to now head back to the negotiating table on a revised deal that will likely omit a sizable signing bonus.

The offer the UAW rejected on Friday included an 8 percent raise over the life of the contract, and a $2,000 signing bonus. In addition, Oshkosh called for a four-fold increase in monthly health care premiums for families.

Oshkosh spokesman John Daggett said late on Friday the $2,000 bonus is no longer valid when the contact expires at midnight.

Contract talks had been tense as workers and local union officials complained the deal was not generous enough, and that language in the contract was unfavorable to hourly workers.

We are obviously disappointed because we felt we had offered a very comprehensive proposal considering today's market conditions and the proposed budget cuts in the Department of Defense, Daggett said in an email to Reuters.

He said the company has accepted an invitation from the union for a meeting, details of which are still being worked out. UAW officials were not immediately available for comment.