The first infantry squad vehicle made by GM Defense was delivered to the US Army on Tuesday. The company had won the contract about four months back, and it has now delivered the first infantry military vehicle to the Army.
US Army Gets First Infantry Military Vehicles From GM Defense
GM Defense started off in 2017, and this is the first big contract of the company. They have extensively used GM’s technologies on military vehicles. Talking about the speedy delivery, David Albritton, president of GM Defense, said that they had achieved a significant milestone by delivering the vehicle in just 120 days after winning the contract. He added that he is very proud of his team and the entire team at GM was leveraging their expertise in engineering and manufacturing capabilities to transform the military vehicle segment.
The Infantry Squad Vehicle can carry nine-soldiers through the battlefield, and it is based on the Chevrolet Colorado ZR2 pickup model. Nearly 90% of commercial components are used in the vehicle, and it is designed for rapid ground mobility.
The company will be delivering about 649 ISVs by 2024, and over the entire eight-year contract, they are expected to deliver over 2065 vehicles.
For the initial 27 ISVs, GM Defense will use the manufacturing facility at Proving Grounds, and it will later be moved to Mooresville in North Carolina that has the capacity to produce higher volumes.
GM Defense won the contract for the ISV in June, and it is worth over $214.3 million. Albritton said that the success of ISV provides them with a wonderful opportunity to expand into several other segments of the governments, and they are even looking at foreign government business in the long run.
Even though both Ford Motor Co and Fiat Chrysler Automobiles both serve the government and the military by providing various vehicles, they do not have an exclusive business arm like GM Defense that is dedicated to developing military vehicles.
GM Defense is also looking forward to winning three more contracts in the near future, and this can bring them good fortune. The Army is in need of nearly 49099 JLTVs, and this offers a good opportunity for GM Defense to work on such vehicles in future. The Joint Light Tactical Vehicle offers enhanced protection for the crew and is a lot better than the old Humvee.
Oshkosh had built the first 15000, and another 34099 will go for bidding in the near future. GM Defense is looking at such contracts to boost their business in this military vehicle segment. The company is conducting a review to analyze its potential to deliver such vehicles if they happen to win the contract. The proposal is expected to start in February 2022, and the contract will be awarded to the winner in September 2022.
If GM Defense manages to win that contract, it will be a huge boost as this will be a 10-year contract that is worth $14.5 billion. The tactical and combat vehicle segment is the most lucrative option for GM Defense. Along with that, the company is also working with other agencies like the Department of Homeland Security and foreign military agencies for such contracts.
Apart from the JLTV program, the company is also looking forward to developing advanced reconnaissance vehicles for the US Marine Corps. The company is not just focusing on the ground system, and they are also planning to work with the Navy to develop underwater tactical vehicles. Apart from that, they are also planning to work with the Air Force on a project that will use Chevrolet Bolt electric car batteries to power electric ground power units.
According to company officials, GM Defense is aiming to win at least $20 billion worth of contracts in the near future. Such contracts will power the revenue base and provide additional funding for their research wing. They are planning to conduct huge research in the area of autonomous vehicle technology and electric vehicles.
The passenger vehicle segment is not showing much promise across the world for major auto companies, and they are trying to innovate new features on a regular basis. Even after this, the auto market has hit a saturation point across the world and companies have to look at alternatives to survive this phase. The passenger vehicles and SUVs are also trying to make a move towards electric in a big way in many countries. This is yet another threat for established automakers as they have to rely on new technology to provide such vehicles.
In recent months, the Covid 19 pandemic has also affected the sales of automobiles by a huge margin across the country. The situation is not likely to improve in the near future, and many companies are struggling hard to keep their manufacturing units in running condition. The lockdown imposed for several months has had a huge impact on the revenues of big automobile companies.
Given this situation, GM seems to be working hard in the direction of gaining military contracts as this will secure their company for the next few years. As such contracts are usually offered for large companies, GM has a big chance of winning few lucrative bids in the near future. As GM also has an exclusive wing GM Defense that is exclusively dedicated to developing military vehicles, they have the upper hand over other competitors in the market.
The advantage these companies get with military contracts is that they are usually multi-year contracts, and this can secure the earnings of the company for many years. On the other hand, when it comes to the passenger segment and commercial vehicle segment, the situation keeps changing very frequently, and most automobile companies cannot rely on such markets in the long run.
In this regard, GM Defense has the right advantage as the dedicated wing to produce military vehicles can boost their business in the near future. Apart from the Army, the company is also working towards developing vehicles for the Navy and other equipment for the Air Force. They are also planning to develop vehicles for foreign agencies, and this can position them in a good place in the market.
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