GM’s protection unit sees $25 billion market in potential navy contracts for automaker

The GM Defense Infantry Squad Vehicle is specifically designed to meet US military specifications. It is based on the mid-size truck architecture of the car manufacturer Chevrolet Colorado ZR2 off-road.

GM defense

DETROIT – General Motors is aiming for significant growth in its revitalized military defense unit, which tacitly restarted three years ago and recently fulfilled its first major U.S. military contract.

GM Defense vice president of growth and strategy, Jeff Ryder, sees a $ 25 billion market for developing new products for the military based on its existing vehicles, parts and technology.

“This is an addressable market where we have the right to win and pursue. And that is exactly what we are doing,” he told CNBC. “As we mature, as we grow, as we expand our operating model, as we make more profits, I believe we will have the opportunity to continue moving in other directions or into adjacent markets. So this number will not increase.” get smaller.”

The company once built tanks for the military during World War II, but has no plans to move this far from its core manufacturing, he said.

Ryder, an aerospace and defense industry veteran, said the military needed electric propulsion and vehicles, as well as autonomous systems – priorities for its parent company. GM will invest $ 27 billion in such technologies through 2025.

The Detroit-based automaker sold a former defense unit of the same name to General Dynamics in 2003 for $ 1.1 billion. Since the relaunch of GM Defense in 2017, the company has ramped up the subsidiary and identified suitable military contracts to bid on.

Given its current size, Wall Street Defense’s GM Defense has not gained much, if any, interest in the assessment, but executives believe the opportunities are great for the unit.

Batteries versus fuel cells

When GM Defense was re-established in 2017, it was meant to be a showcase for the automaker’s fuel cell technologies. But similar to the consumer market, the demand was not there yet due to the cost and lack of infrastructure.

Ryder said fuel cells are still part of the company’s product offering, but GM Defense is now focusing on shorter-term business opportunities, including battery electric vehicles.

“The reality is that the army wasn’t ready to buy 1,000 vehicles to build a fuel cell-powered vehicle,” he said, adding, “Electric vehicles are a very, very real conversation right now.”

The US Army began evaluating the Chevrolet Colorado ZH2 fuel cell electric vehicle in 2017. It is based on the GM Colorado ZR2 off-road pickup.

GM

Fuel cell vehicles work similarly to electric vehicles, but run on electricity from hydrogen and oxygen. Such vehicles only give off water while driving and are considered complementary and better for longer journeys than battery electric vehicles. The vehicles can run on renewable hydrogen from sources such as wind and biomass.

GM previously partnered with the US defense industry in evaluating fuel cell products, including a Colorado-based pickup truck called the ZH2 and an unmanned underwater vehicle. The company also unveiled a military vehicle platform called the Silent Utility Rover Universal Superstructure (SURUS) as evidence of its fuel cell technologies.

Some advantages that electric vehicles and fuel cells offer over gasoline and diesel-powered vehicles are the near-instantaneous torque for fast movements, as well as the lack of noise and thermal detection, according to Ryder.

According to GM, the Silent Utility Rover Universal Superstructure (SURUS) platform is a flexible fuel cell platform with autonomous functions. It was designed as the basis for a family of commercial vehicle solutions.

GM

$ 214 million contract

Until the US military is ready to adopt such technologies largely, GM Defense will focus in the short term on vehicles with internal combustion engines as well as more traditional powertrains and technologies.

GM Defense received a $ 214.3 million contract from the US Army earlier this year to manufacture and maintain new infantry squad vehicles used to transport soldiers to battlefields. The company has partnered with Ricardo Defense, who will lead product support for the vehicles.

The infantry vehicles are based on the mid-size Chevrolet Colorado ZR2 from GM and use 90% of the off-the-shelf parts, which reduces development and production costs. Unlike the consumer pickup, the ISVs are light and durable enough to be loaded and carried by a UH-60 Blackhawk helicopter.

2018 Chevrolet Colorado ZR2

Source: General Motors

“The reach back to GM is huge,” said Mark Dickens, GM Defense’s chief engineer, at a recent media event. “That is the key to success.”

Tim Herrick, interim president of GM Defense who also serves as GM vice president of global product programs, said the ISVs are “just the beginning” for the division. Ryder said other variants, including those with electric drivetrains, are very possible.

GM Defense has started renovating an existing building to support the production of ISVs in North Carolina. The facility will help manufacture 649 ISVs and support the production of up to 2,065 vehicles with additional approval over an eight year period. The first vehicles delivered to the U.S. Army were built at GM’s Milford Proving Ground in Michigan.

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