AM General, the presently privately-held defense contractor that created the original Humvee (spelled “HMMWV,” if you want your spellchecker to become familiar with apoplexy), is reportedly looking for a buyer:
AM General has put itself up for sale and has hired investment bank Macquarie Group Ltd to seek potential bidders in a deal that could value the builder of Humvee military vehicles at more than $2 billion, people familiar with the matter said on Monday.
Potential bidders include competitors in the military ground vehicle market, such as General Dynamics, Oshkosh Corp and BAE Systems PLC. according to two people familiar with the matter. Auto makers like Fiat Chrysler and General Motors Co may also be potential buyers, one of the sources added.
The wise buyer asks: “Is there a demand for AM General’s products?” It certainly seems so:
Last month, AM General was awarded an Army contract for as many as 2,800 new M997A3 High Mobility Multipurpose Wheeled Vehicle (HMMWV) ambulances. The contract could be worth as much as $800 million if all options were exercised, AM General said at the time.
Last year, the Pentagon awarded AM General a $550 million contract to deliver HMMWVs for use as protected weapons carriers, cargo transporters and ambulances to Afghanistan, Iraq, Ukraine, Jordan, Slovenia, Bahrain, Colombia, Bosnia and Kenya as a part of a larger Foreign Military Sales agreement.
And you have to figure that these deals are remarkably profitable, given that the Humvee has been in production since 1984: surely by now they’ve amortized the tooling costs. Its replacement, the Joint Light Tactical Vehicle, is in development over at Oshkosh, but you can scarcely blame DOD for selling last-generation trucks at current prices.