Deadline eased for $15 million Humvee replacement project
November 12, 2007
Crain's Detroit Business
by Chad HalcomThe deadline rush is off for designers and contractors on a $15 million project to replace the Humvee in the U.S. military vehicle fleet.
The Army and Marine Corps, which have sought up to 160,000 Joint Light Tactical Vehicles to replace the Humvee, recently backed off their stepped-up production timetable on the project
Sterling Heights-based General Dynamics Land Systems was among several competing companies in a showcase of early prototypes last month at the U.S. Army TACOM Life Cycle Command center in Warren.
"What the military has effectively done is take a step backward and look at its overall needs," said Donald Howe, senior director of General Tactical Vehicles, a joint-venture company of General Dynamics Land Systems and AM General L.L.C., makers of the Humvee. "We are encouraged by the decision because it allows us to bring several exciting technologies into maturity before we proceed."
General Dynamics Land Systems is a division of Falls Church, Va.-based General Dynamics, which reported revenue of $24 billion last year. Much of the design work on Joint Light Tactical Vehicles has taken place over the past year at General Dynamics' offices in Sterling Heights and AM General's operation in Livonia.
TACOM has led efforts to build a family of new vehicles that are better equipped to withstand improvisational weapons than the Humvee. TACOM was hoping to enter a preproduction phase next year and begin production by 2010, but in late summer, the agency returned to its original 2012 deadline.
Several manufacturers already have a prototype because they had been operating under the 2010 timetable. They showcased those designs for the Army at TACOM.
At the review, the General Tactical Vehicles joint venture submitted an early model technology demonstrator. Maryland-based Lockheed-Martin Corp. offered a fairly complete submission in the 24,000-pound Combat Tactical Vehicle category of Joint Light Tactical Vehicles. Oshkosh, Wis.-based Oshkosh Truck Corp. focused its efforts on a demonstrator in the 16,000-pound Utility Vehicle Variant subcategory.
Sheldon Smith, public affairs specialist for the Army in Washington, agreed that the move back to 2012 reflects a "global strategy" to make Joint Light Tactical Vehicles a more permanent next-generation transport in all military campaigns.
"Even in Iraq and Afghanistan, we know the situation is going to change over time, our role will change and our goals will change," Smith said. "(But) the world is always becoming more dangerous somewhere, and we need equipment to respond on a global level."
Paul Nisbet, a defense and aerospace industry analyst with JSA Research Inc. in Newport, R.I., said the news on Joint Light Tactical Vehicles production and military procurement does not appear to cloud General Dynamics' potential earnings. He said other projects are probably more susceptible to budget cuts or changing presidential administrations than tactical vehicles will be.
"I did not see this as a slowing down so much as a returning from rushed to a normal pace of work," Nisbet said.
"There are weapons like missile defense and strategic weapons that are unpopular with Democrats, and other things may be on the block in a different administration. But JLTV is for the military's standing vehicle needs, regardless of things like Iraq."
Chad Halcom: (313) 446-6796, chalcom@crain.com
General Tactical Vehicles is a joint venture of General Dynamics Land Systems & AM General.
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