AM General is up for sale, according to sources close to the company.
Makers of the iconic HMMWV--better known as the “Humvee”--are up for sale, according to a new report from Reuters.
The military contractor makes armored vehicles and transports of all shapes and sizes for the Pentagon as well as multiple allied nations. It remains a profitable company, and Reuters provided no explanation for why the company is suddenly up for sale.
AM General has hired investment bank Macquarie Group Ltd to negotiate with potential buyers for the company. Other defense contractors, such as General Dynamics, Oshkosh Corp, and BAE Systems, are likely first points of interest. However, civilian carmakers such as General Motors and Fiat Chrysler are also potential buyers.
Of the civilian buyers, General Motors has the most experience with AM General. GM licensed the HMMWV design in order to make a civilian version for the domestic market: the H1. It eventually evolved into the H2 and H3 before finally ceasing production in 2010.
The most recent version of the Hummer built by AM General features a 6.5-L turbodiesel that produces 190 hp and 380 lb-ft of torque. Power is routed to a 4-speed automatic transmission, and when not fully loaded it’s capable of reaching a top speed of over 70 mph on the highway. However, its bulky design and heavy-duty suspension are more at home in off-road environments, where top speed is much less of a concern.
Last year, AM General reported an operating profit of $160 million thanks to lucrative contracts with the US Army. An $800 million contract was signed last month to produce 2,800 HMMWV ambulances for the army, while last year the company signed a $500 contract to produce multiple versions of the Humvee for the militaries of Afghanistan, Iraq, Ukraine, Jordan, Slovenia, Bahrain, Columbia, Bosnia, and Kenya.
The US Army is searching for a replacement to the HMMWV, which they’ve dubbed their Next-Generation Combat Vehicle. No word on whether AM General has submitted a proposal, but it seems unlikely given their current for-sale status. Whoever purchases them will have to act fast, as the army is looking to begin production in 2022.