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Humvee maker AM General reportedly for sale, with interest from FCA, GM

WASHINGTON — 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 this week. Potential bidders include competitors in the military ground vehicle market, such as General Dynamics, Oshkosh Corp and BAE Systems, according to two people familiar with the matter. Automakers like Fiat Chrysler and General Motors may also be potential buyers. GM licensed Hummer from AM General in 1998 to build civilian SUVs. None of the companies would comment or reply to a request for comment. The South Bend, Indiana-based AM General is currently owned by private equity firms. A possible sale of AM General follows a rash of deals over the past 18 months among defense contractors. But relatively fewer makers of defense equipment have gone on the auction block. Last year, United Technologies acquired Rockwell Collins for $30 billion, and in March, TransDigm Group continued its acquisition spree with a $525 million deal for Extant Components Group. AM General could fetch about 10 times its annual earnings of $160 million, one of the people said. The company's favorable tax treatment because of its current status as an limited liability corporation, would allow a buyer to reduce the company's taxable earnings for 15 years. That coupled with recent contract awards could push the ultimate value of the company to over $2 billion in a sale. The sale, should it happen, comes as the U.S. Army is gearing up for a broad effort to modernize its forces, including seeking prototypes of its Next-Generation Combat Vehicle in fiscal year 2022. 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, Columbia, Bosnia and Kenya as a part of a larger Foreign Military Sales agreement. The sale of AM General offers an opportunity to purchase a prime contractor that delivers a finished product to the Pentagon, and not just an add-on system or service.

Why didn't GM recall fire-prone Hummers earlier?

As early as 2009, motorists reported fires in the Hummer H3. In a complaint filed that March with the regulatory agency in charge of vehicle safety, one motorist said they leaped into a smoldering vehicle and drove it away from gas pumps moments before it was engulfed in flames. Three months later, another motorist described how a fire spread from behind the glove box and consumed their H3. Dozens of car owners filed similar complaints with the National Highway Traffic Safety Administration in the six years that followed, detailing car fires of varying severity that originated in the HVAC systems of their Hummer H3s. But General Motors didn't issue a recall for any of the affected cars until last week, prompting fresh questions about how the company treats safety concerns in the wake of an ignition-switch flaw that went unaddressed for years and, at latest count, is responsible for killing at least 124 motorists. In recall documents filed with NHTSA last week, GM initially said it knew of three fires associated with the defect. Within hours, the company said it knew of 42 fires associated with the problem and three injuries sustained by vehicle occupants. A company spokesperson attributed the inconsistency to a "misstated" number in the original documents and that the higher number comes from NHTSA complaints, reports to GM and TREAD data. Beyond that discrepancy, the documents show General Motors, which has touted a revitalized attitude toward safety concerns since the ignition-switch recalls, did nothing upon determining there was a problem with the H3s. Prompted by two complaints the company received in September 2014, General Motors says it launched an internal investigation related to melting blowers in the HVAC system on December 8, 2014. In that investigation, the company says it confirmed a problem existed, finding that "mismatched electrical conductivity could result in overheating and melting of the blower motor connector module." But even with that conclusion, the company opted to close its internal investigation on April 29, 2015, without taking any action. It wasn't until NHTSA officials met with GM representatives in a meeting on June 18, 2015, that General Motors was prompted to reconsider.

GMC Hummer EV SUV prototypes hit the trails in Moab

It seems like GMC's new Hummer EV pickup only just hit the market, but it's almost time to roll the hype train back through for the next installment: the SUV. GM President Mark Reuss shared images of some prototypes crawling on the rocks outside Moab in what he called "final testing validation" ahead of the SUV's projected arrival in showrooms some time in early 2023.  "With its aggressive 49-degree departure angle and tight turning radius of just 35.4-feet, the HUMMER EV SUV’s maneuverability, capability and performance make it an off-road supertruck," Reuss said in the post accompanying the photos. The over-the-river-and-through-the-woods routine depicted in the photos doesn't reveal much we don't already know about the forthcoming electric 4x4, but we can at least contextualize that 49-degree departure angle; the best you'll get from any Jeep Wrangler currently on sale is 40.4 degrees.  GMC's Hummer SUV will launch early next year with an 830-horsepower drivetrain, offering roughly 300 miles of driving range. Pricing will start at $105,595 before options. Later in 2023, GMC will release an EV2X variant with up to 625 horsepower, similar range and an $89,995 price tag. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.