Defense

Private fairness agency buys Humvee-maker AM General

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This story has been up to date to incorporate feedback from a floor car analyst.

WASHINGTON — Humvee-maker AM General has been acquired by KPS Capital Partners, a personal fairness agency recognized for purchasing financially distressed producers, the businesses introduced Wednesday.

KPS acquired AM General of South Bend, Indiana, from MacAndrews & Forbes in a deal wherein phrases weren’t disclosed. AM General has largely been stagnant since shedding the competitors for the U.S. Army’s Joint Light Tactical Vehicle in 2015 to Oshkosh.

Following its loss within the JLTV competitors, the corporate turned to the worldwide market to proceed rising its Humvee enterprise, comparable to by providing to international clients a multipurpose truck with a military-grade rolling chassis from its Humvee design with a la carte add-ons.

KPS Partner Jay Bernstein mentioned in a joint assertion that the agency would proceed to work with AM General’s chief government, Andy Hove, in addition to its administration and workers “to build on this great platform, organically and through acquisition.”

“We intend to leverage the Company’s commitment to research, technology, innovation and new product development, as well as its heritage and iconic brand name,” Bernstein’s assertion learn.

Hove mentioned the agency would work with KPS “to continue to execute our strategy and invest in our very ambitious growth plan.”

“KPS’ demonstrated commitment to manufacturing excellence, continuous improvement and commitment to invest in technology and innovation will only enhance the Company’s ability to compete in today’s military and commercial marketplace,” Hove mentioned.

“Plenty of industrial companies and investment firms had considered buying AM General,” James Hasik, senior fellow on the Center for Government Contracting at George Mason University, instructed Defense News July 22. “And plenty of companies have considered teaming with AM General for a bid on a forthcoming production program.”

AM General has continued to attempt to adapt to the wants of the U.S. army, bringing a robotic fight car to an Army demonstration final 12 months because the service mulls the way forward for robots on the battlefield. The firm additionally competed for the Squad Multipurpose Equipment Transport car program however was not chosen.

Yet, AM General has remained a single-product agency with the Humvee, Hasik famous, and the way forward for the Humvee is “hard to call.”

Many militaries world wide use Humvees, and the U.S. Army plans to maintain some in its fleet, however the U.S. Marine Corps is divesting its inventory. According to Hasik, it’s potential that for the reason that Humvee is inexpensive than the JLTV and would doubtless be relegated to noncombat roles, the Army would possibly select to buy pickup vehicles as a substitute.

“The Humvee was developed in part because the Army’s pickup trucks of the 1970s were unimpressive, but that was 50 years ago, and automotive technology has advanced,” he mentioned. “Today’s pickup trucks are much cheaper to buy and operate, and that’s what the Canadian Army has done.”

While AM General has give you some novel concepts, “nothing has stuck,” Hasik mentioned. For a number of years, the corporate has proven up at commerce exhibits touting a howitzer on a Humvee, prefer it did at London’s DSEI exposition in late 2019. Still, the U.S. Army is struggling to determine how it could match into formations.

The excellent news for KPS is that the corporate has a operating manufacturing facility with “efficient, medium-speed production of 4×4 military trucks and a production team who know how to do that,” Hasik mentioned. “That’s an important skill set, as it works better for military programs than enlisting a pickup truck factory, which must make them in the hundreds of thousands to make money.”

AM General has marketed on its web site that it may construct greater vehicles, and the Army has simply issued a request for info for a program to switch all of its heavy vehicles, Hasik identified. “It could also build small trucks, similar to the Humvee, for future autonomous applications. There’s no guarantee, but we might see lots of those in a few years.”

“All in all, I suspect that KPS didn’t buy AM General just to wring some more efficiencies out of the Humvee program. The folks there probably see some of these upside possibilities as well,” he added.





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