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  14 août 2020 | International, Terrestre

  AM General CEO on acquisition by a private equity firm

  WASHINGTON ― KPS Capital Partners is acquiring Humvee-maker AM General, the private equity firm announced last month, marking a new chapter for the South Bend, Indiana-based vehicle maker. AM General President and CEO Andy Hove will continue to lead the company, and KPS Partner Jay Bernstein said the firm would continue to build on the ubiquitous Humvee, leveraging the company's “research, technology, innovation and new product development, as well as its heritage and iconic brand name.” The Humvee appears to have some growth ahead. For one, U.S. Army budget documents call for $1.5 billion through 2025 to pay for modernization of its fleet of High Mobility Multipurpose Wheeled Vehicles and their up-armored variant. That can include replacing major components, applying new technologies or replacing vehicles entirely. After the Army reaches its procurement objective for the Joint Light Tactical Vehicle, made by Oshkosh, it will have an enduring requirement for 54,800 Humvees. Otherwise, AM General ― which has advertised both its Brutus 155mm and Hawkeye 105mm mobile howitzers ― is expected to participate in the Army's mobile howitzer shoot-off evaluation at Yuma Proving Ground, Arizona, next year. Meanwhile, the Army is expected to complete a new tactical wheeled vehicle strategy in fiscal 2021, which has thus far received congressional support, per the House and Senate versions of the annual defense policy bill. Hove, who has said KPS will continue to execute AM General's existing strategy, spoke with Defense News on Aug. 6. This interview has been edited for brevity and clarity. Private equity firm KPS Capital Partners is in the process of acquiring AM General. At this preliminary stage, what would you say are KPS' plans and vision for the company? I think [KPS partner] Jay Bernstein represented it in his quote in the announcement that they feel really good about the capabilities of AM General and the strategy we've been executing. We've discussed with them where we can go. They're confident in our business and the growth prospects of AM General. They feel good about and stand behind our strategy, and we're going to work together with them. Will the company focus more on the Humvee, or do you see it becoming more flexible? What is the future for the Humvee? Who are its customers these days? To say we're only focused on the Humvee today would not be a correct premise. We've made investments across the board, in base automotive systems, and then automotive systems that have a particular special use. Our core focus is in solving very complex mobility challenges for customers. So the Humvee has a great future. I would offer that you turn to not what I say about what the Army will do but what the Army says they're going to do on the Humvee fleet, which is to steadily and systematically manage a very large fleet by systematic replacement of that fleet and recapitalization of that fleet going forward. They've been buying new-built Humvees to replace old Humvees over the last four years at a pretty heavy clip and have announced their intention to continue to do that going forward. We're obviously going to focus on the Humvee because there's significant demand. It is today the world's leading military 4x4 in its class, and we build more of them than any other military vehicle manufacturer in the world, and especially more than anybody in our weight class. That won't be the only thing we invest in. You can see our investments in the Hawkeye, which brings game-changing breakthrough technology [in relation to] how artillery systems are moved around and employed on the battlefield, together with a whole other range of implementing technologies such as autonomous navigation, off-board power and those kind of things. The U.S. Defense Department is an important customer, but a considerable portion of our businesses is global business, so we take a global view of how we solve mobility challenges for our customers around the globe. The Army recently issued a request for information about replacing heavy trucks. Is that a potential opportunity? We certainly feel like we have something to offer, a range of things to offer there, and that RFI's only been out for a couple of weeks. We'll will certainly take a closer look at that. We're also taking a look at the JLTV competition they announced back in February. Defense News recently characterized AM General as “largely stagnant” since losing the competition for the JLTV in 2015 to Oshkosh. Do you want to push back at all to talk about AM General's time under McAndrew & Forbes? The JLTV decision was 2015, and the four years since the announcement on the JLTV competition we've built more military vehicles than Oshkosh or any other military vehicle manufacturer by a long shot, and sold them to more customers around the globe than anyone else. I think that's far from being stagnant. There are a lot of adjectives you can apply to the company. “Stagnant” would not be the one I would apply. Private equity firms will typically set up companies they buy for faster growth, and then potentially that'll lead to a future sale. Do you think that's something that might happen here, and what do you predict? Is there any indication of time horizons for KPS? KPS has made a lot of smart investments, they have a pattern, but they're not going to be pigeonholed into a particular time frame for a next-step strategy. https://www.defensenews.com/interviews/2020/08/13/am-general-ceo-on-acquisition-by-a-private-equity-firm/

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  9 octobre 2019 | International, Terrestre

  Who Will Build 651 Parachuting Trucks For The Army?

  By SYDNEY J. FREEDBERG JR. WASHINGTON: Three very different teams are vying to build the Army's Infantry Squad Vehicle, a truck tough enough to parachute out of an airplane and then drive away cross-country with nine heavily armed infantrymen. By Nov. 13th, each team owes the Army two vehicles for testing, with the winner getting a contract for 651 ISVs next year. Let's meet the players. The Oshkosh-Flyer team is the closest thing to an incumbent in the competition. The Army had earlier picked the Flyer-72 as an interim air-droppable transport, the A-GMV, and Flyer is offering an upgraded version for the follow-on program, ISV. Actual mass production will be done by Oshkosh, which makes a host of Army trucks — most prominently, the beefed-up successor to the Humvee, the Joint Light Tactical Vehicle (JLTV), which the Army and Marine Corps plan to buy over 50,000 of in the coming decades. What's more, Oshkosh plans to build the 5,000-pound ISV on the same assembly line as all its other vehicles, from the 14,000-lb JLTV to 10-ton FMTV dump trucks. (The earlier version of the Flyer-72 was mass-produced by General Dynamics). The ISV will be the lightest vehicle on the Oshkosh line, VP George Mansfield told me, but the company is confident it can build the air-droppable trucks more affordably than Flyer could — and at least as well. In fact, Mansfield said, he expects the Oshkosh-built version to be more reliable. That's in part because of Oshkosh's manufacturing expertise — it won the JLTV contract in large part because its offering broke down less than half as often as uparmored Humvees — and in part because of Flyer's extensive field experience with the earlier versions built for the Army and Special Operation Command. As a team, Mansfield told me, “we've learned a lot about reliability, we've learned a lot about life-cycle cost, that now we can take here at Oshkosh with our extensive knowledge of all the other product lines we sell to the Army.” Polaris and SAIC both have plenty of defense experience. Polaris's DAGOR did lose the earlier A-GMV contest to Flyer, but numerous DAGOR variants are in widespread service with Special Operations Command, the 82nd Airborne Division (shown in the video above), Canada, and other foreign customers the company can't disclose. “The DAGOR is already certified” — by the Army itself — “for all of the transport requirements that the Army is looking for, whether that's internal air transport, sling-load transport, or air-drop,” Polaris VP Jed Leonard told me. And each of those prior customers required tweaks to the platform or special mission equipment — heavy weapons, sensors, radios — that the DAGOR could easily accommodate. Integrating such high-tech kit is SAIC's core competency. While not a manufacturer itself, SAIC has done decades of integration work for the military, most extensively on the MRAP program, fitting other companies' vehicles with the sophisticated electronics that turn a truck into a weapons system. It also provides extensive maintenance and other support worldwide. The two companies have worked together on and off, on small projects, for years, as various customers bought Polaris vehicles and then asked SAIC to equip them for specific military missions. But the current partnership is a big step up for both. The odd man out is GM Defense, which giant General Motors created — in a sense, re-created — not quite two years ago after selling off most of its defense programs back in 2003. GM Defense president David Albritton just came aboard a year ago and has spent much of his time working with “Mother GM” on potential joint projects and spin-offs, from self-driving car technology to hydrogen fuel cells, he told me in an interview. “I'm not reporting any revenues at this point,” he said, although GM Defense does already have some contracts he can't disclose. GM's offering is the only contender without a prior track record in the military. But their ISV is derived from the Chevrolet Colorado, of which US customers have bought more than 100,000 a year of since 2016, giving GM staggering efficiencies of scale no competitor can match. Specifically, the GM ISV a beefed-up, militarized version of the Colorado's offroad racing variant, the ZR2, with which it shares 70 percent of the same parts — parts that are available from Chevy dealers worldwide. GM builds over 10,000 ZR2s a year: a rounding error for General Motors but a megaprogram for the Army. GM's scale advantage is not just in production and parts. It's also in engineering. The company spends over $7 billion a year on R&D, Albritton told me, and its ISV offering includes advanced suspension systems like jounce shocks and dynamic spooling. GM's challenge is overcoming its inexperience in the defense sector — especially, proving it can integrate military electronics onto its civilian-derived vehicle. LRPF: Long-Range Precision Fires. NGCV: Next-Generation Combat Vehicle. FVL: Future Vertical Lift. AMD: Air & Missile Defense. SL: Soldier Lethality. SOURCE: US Army. (Click to expand) The Big Picture Overall, ISV is an especially interesting competition because none of the contenders is a classic defense prime: Oshkosh and Polaris both have lots of civilian customers alongside their extensive military business. Flyer is a subunit of a modest aerospace and defense components-builder called Marvin Group. SAIC is a systems engineering and service firm rather than a traditional Original Equipment Manufacturer. And GM of course is one of the biggest civilian manufacturers in the country. “We make upwards of nine million cars a year,” Albritton told me, each put together out of roughly 30,000 different parts. Compare and contrast the Army's Optionally Manned Fighting Vehicle program, which is de facto down to a single competitor — defense industry stalwart General Dynamics (which bought GM's previous defense business back in 2003). ISV shows the kind of variety that the Army wants to encourage and needs to infuse innovation and competition into its programs. Yes, at 651 trucks — at least, in the initial 2020 contract — this is a modest program in both size and technological ambition. It's easily overshadowed by the hypersonic missiles, high-speed aircraft, and robotic tanks of the Army's Big Six priorities. By contrast, for the predecessor competition (the one Flyer won) back in 2015, we ran eight stories in three months because there was so little else the cash-strapped and acquisition challenged Army was buying at the time. But the Infantry Squad Vehicle is still an important piece of the larger Army puzzle. The Army's infantry brigades — especially its 82nd Airborne parachutists — are its most strategically deployable units, easily packed into aircraft and flown around the world overnight, while heavy armored forces cram two tanks into one C-17 or, more often, go by ship. But once the infantry arrives, it moves on foot. (Although we bet everyone in the 82nd remembers being called a “speed bump” in this Defense Science Board study.) The idea of ISV is a troop transport light enough to be air-dropped or, more often, delivered by helicopter. That way, the troops can land a long distance from their target — specifically, far enough their transport planes or helicopters aren't shot down by anti-aircraft missiles — and then advance quickly overnight before attacking on foot at dawn. We expect to see all three competing vehicles on the show floor at the Association of the US Army megaconference next week. https://breakingdefense.com/2019/10/who-will-build-651-of-the-armys-parachuting-truck/

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  1 octobre 2018 | International, Aérospatial

  US military posture in Asia could change if China declares another Air Defense Identification Zone

  By: Kyle Rempfer If China goes forward with plans to establish another Air Defense Identification Zone in the region, the U.S. could be forced to change its military posture in Asia, a senior national security official said this week. “We oppose China's establishment of an ADIZ in other areas, including the South China Sea,” Evan Medeiros, the senior director for Asian affairs at the National Security Council, said in an interview with Japan Times. “We have been very clear with the Chinese that we would see that [setting of another ADIZ] as a provocative and destabilizing development that would result in changes in our presence and military posture in the region." An ADIZ is airspace over land or water in which the identification, location and control of aircraft is jointly performed by civilian air traffic control and military authorities in the interest of a country's national security. China set up one ADIZ over the East China Sea in 2013, which many viewed as an attempt to try and bolster its claims over disputed territories, like the uninhabited Senkaku islands. China began to elevate its claims to the Japan-controlled Senkaku Islands in the 1970s after studies indicated there may be vast oil reserves in the surrounding sea bed, according to Japan Times. The United States is obligated to defend aggression against territories under Japanese administration under Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security. Defense Secretary James Mattis reaffirmed in 2017 that the defense obligation extends to the Senkakus. “I made clear that our longstanding policy on the Senkaku Islands stands,” Mattis said, according to a Pentagon transcript. “The United States will continue to recognize Japanese administration of the islands.” U.S. officials have also criticized China for setting up an ADIZ that overlaps with similar zones operated by Japan, South Korea and Taiwan without prior consultation. The Chinese have labeled recent missions by nuclear-capable U.S. Air Force B-52 bombers over the South China Sea as “provocative." Two separate B-52s also flew over the East China Sea this week. The Pentagon called all of these flights routine. “If it was 20 years ago and had they not militarized those features there, it would have been just another bomber on its way to [Naval Support Facility] Diego Garcia or wherever,” Mattis told the press, according to a Pentagon transcript. “So there's nothing out of the ordinary about it." China has also been accused of militarizing the South China Sea — which includes important shipping routes, fisheries and hydrocarbons. The Chinese military has built islands on existing reefs and placed airstrips, radars, missiles and other military equipment on them. Multiple other countries in the region, to include Vietnam and the Philippines, claim portions of the South China Sea as well. https://www.airforcetimes.com/news/2018/09/28/us-military-posture-in-asia-could-change-if-china-declares-another-air-defense-identification-zone