Potential deals could reach as high as $2 billion.
AM General is looking for a new owner. This company was the manufacturer of the original High Mobility Multipurpose Wheeled Vehicle (HMMWV) or Humvee and one of the largest firms that design, engineer, and manufacture military vehicles. According to Reuters, the company has appointed Macquarie Group Ltd, an investment bank, to search for potential bidders. These are reportedly two competitors in the military business as well as two automakers.
General Dynamics, Oshkosh Corporation, and BAE Systems PLC all seem like good candidates for the military ground vehicle market. However, General Motors, Fiat Chrysler Automobiles, and General Dynamics are not likely to be your typical bidders for military vehicle producers. The information is based on “people familiar” with the matter, and nothing has been confirmed.
A potential deal with AM General could be worth $2 billion or more, according to preliminary calculations. The company received an Army contract to purchase 2,800 new M997A3 Humvee ambulances vehicles. This deal is estimated to be worth around $800 million. AM General was awarded a $550 million contract last year as part of a larger Foreign Military Sales Agreement. The contract covered HMMWVs that will be used as cargo transporters, protected weapons carriers and ambulances in Afghanistan, Iraq, Ukraine and other countries.
General Motors bought the Hummer brand name from AM General in 1998 to market three generations military-based civilian SUVs. These were the original H1, based upon the Humvee, the H2 and the H3, which were both built on civilian-market GM architectures.
AM General’s innovations in other areas of automotive are also well-known. Indiana-based AM General even has its proposal for a USPS mail carrier truck. This is one of five options. AM General is competing with Oshkosh/Mahindra, Hasan/Morgan Olson and VT Hackney/Workhorse for a $6.3 billion deal. The USPS should announce the new contract before the end of this year. The Postal Service only wants right-hand drive vehicles with all-wheel drive and optional air conditioning.