General Motors Defense has launched an assault to capture a larger share of the global armoured vehicle market as governments around the world replace their aging fleets of tracked vehicles, including tanks, with heavy-duty wheeled carriers.
The London, Ont.-based division of General Motors of Canada Ltd. just finalized the last phase of a contract with Canada's Department of National Defence for a total of 651 eight-wheel armoured vehicles worth about $1.6-billion. It's currently negotiating deals with the Australian and New Zealand governments that could generate several hundred million dollars in revenue. And now GM Defense has it sights set on outfitting the U.S. military with wheeled vehicles in a bid that could be worth up to $12-billion (U.S.).
"We are pursuing a rather ambitious and large U.S. Army procurement," said Kevin McKittrick, manager of human resources and public relations with GM Defense.
The U.S. Army, which is keen on adding smaller, wheeled vehicles to its inventory of large track-based vehicles, is in the market for a company to manufacture between 1,875 and 6,750 eight-wheel machines, Mr. McKittrick said.
Depending on the number of brigades the U.S. government plans to outfit, the contract, which is expected to be awarded this fall, could be worth between $4-billion and $12-billion, he said.
Troops in Fort Lewis, Wash., are already testing 32 of the Canadian-made light armoured vehicles or LAVs, and that could bode well for GM Defense.
"The LAV 8-by-8 is considered to be a strong contender for the U.S. Army's [medium armoured vehicle]requirement," noted a recent article in Jane's Defence Weekly, a British publication that specializes in global military issues.
The scope of GM Defense has grown remarkably. GM set up a diesel division in 1950 to make diesel-electric freight and passenger locomotives. By the 1970s, the diesel division added wheeled armoured personnel carriers to production. At the time, the vehicles were seen in military circles as a major break in tradition from the tracked vehicles that had dominated military operations.
Last year, it acquired Motorwagenfabrik AG or Mowag, the Swiss company that developed the first light armoured vehicle.
Today, GM Defense employs about 1,200 workers and the company says it controls about 31 per cent of the world market, although experts don't have a handle on the overall value of the industry. (The other arm of GM's diesel division is still in the locomotive business and employs about 1,700 in London.)
However, the appetite for military vehicles has generally been shrinking as defence budgets around the world are slashed. Despite the challenges, GM Defense is churning out vehicles whose popularity could roll over tank production.
"Every army in the world is looking at the future of tanks," said Lieutenant-Colonel Reg Duchesneau, a spokesman for the Canadian Army.
"Right now you're at the crux of history for whether the tank will continue as it has been, whether it will change, or go by the wayside."
Wheel-based vehicles are cheaper to maintain, offer faster road speeds, can travel longer distances, provide smoother rides, can be easily airlifted and recent improvements in technology allow them to carry heavy equipment and weapons, observers say.
Another article in Jane's Defence Weekly noted that "recent peacekeeping operations have shown that wheeled vehicles are generally more suited to this mission than their tracked counterparts."