Chamber Chief Hopeful for New AM General Vehicle
When AM General announced this week that it is teaming up with Fiat Chrysler Automobiles (NYSE: FCAU) to create a concept vehicle for a military-grade version of the 2020 Jeep Gladiator pickup truck, South Bend Regional Chamber of Commerce President Jeff Rea got excited about the possibilities.
“To see the announcement this week about the Gladiator and the partnership with Jeep and the idea of producing a new vehicle has people optimistic that it could mean good things for the future of the company,” said Rea.
The Indiana-based automaker is looking at the possibility of building the new Jeep pickup with FCA, but for right now, it’s only a concept. For the chamber leader, it’s a spark of hope.
“We'd love it to be home to a vehicle where for the next 20 years or 30 years the military comes to rely on that. And that means sound and stable employment for the area,” said Rea,
AM General is headquartered in South Bend and the company’s manufacturing plant is in neighboring Mishawaka.
For decades, AM General created thousands of jobs by building thousands of the military High-Mobility, Multi-Purpose, Wheeled Vehicle, or Humvee, at the Mishawaka plant.
While the Department of Defense still awards contracts for Humvees, the military decided in 2015 to eventually replace the vehicle with the Joint Light Tactical Vehicle built by Wisconsin-based Oshkosh Corp. (NYSE: OSK) Foreign governments also purchase Humvees, but Rea says military demand is not the same as it was.
“The Humvee is the most recognizable military vehicle in the world and the fact that they make them right here and have made such a good quality vehicle for so long, has people really excited about this next generation,” Rea said.
In later years, the company produced the Hummer H2, a civilian version of the SUV, in an adjacent factory. But that product is no longer made, and it left hundreds of workers without jobs.
In 2017, AM General sold the former H2 plant to a Chinese automaker for $160 million. SF Motors announced it intended to build electric cars in Mishawaka and hire more than 400 workers. But in July of this year, the company announced layoffs and suspension of production. Rea says the company had only hired about 85 people for the Indiana plant.
Among the reasons cited for the decision was the ongoing trade war between the U.S. and China, plus a recent downturn in the Chinese economy.
“So, we're in kind of a wait and see situation to see what might happen with us, China and trade, tariffs and all that discussion,” said Rea. “We're optimistic that even if it's not the electric vehicle that SF Motors is doing it, perhaps it becomes a great spot for someone else.”
The companies are trying to gauge interest from the U.S. military on the proposed beefed-up military style of the pickup truck called the Gladiator XMT – or Extreme Military-Grade Truck.
The concept vehicle was introduced this week at a military car show in Washington D.C.
“This new venture gives us an opportunity to showcase our expertise in light tactical vehicles and help FCA maximize the Gladiator’s global reach and potentially enter new military markets,” said AM General President and CEO, Andy Hove.
Rea acknowledges AM General and FCA have only developed a concept for the military Gladiator. Plus, since FCA already produces Jeeps at their own plants, the possibility the companies would build in Mishawaka is uncertain at best.
“We'll keep our fingers crossed that they've decided to produce those here.”
AM General says with its experience with Humvee, it can build mission-specific, light-weight tactical trucks, based on military customer requirements.
“We're betting on our local workforce that they can't build a better product anywhere else.”