GM Could Bring Hummer Manufacturer Back Into The Fold

Report

AM General is up for sale, with General Motors and Fiat Chrysler identified as potential suitors.

General Motors and the Hummer have had a relationship rockier than the rugged terrain the marshal off-road vehicles are design to travel. But the two could come together again if the Detroit automaker seizes the opportunity.

According to Reuters, AM General (which manufactures the Humvee for military applications) is putting itself up for sale, with a potential sale price exceeding $2 billion. And it identifies GM among the potential suitors, opening the door for the industrial giant to bring the company even closer into the fold than it ever was before.

The defense contractor based in South Bend, Indiana, traces its roots back to 1903, but its modern history started in earnest in the early 1980s when it first began producing the High Mobility Multipurpose Wheeled Vehicle (HMMWV, or Humvee for short) for the US military.

With cameras rolling during the Gulf War of 1991, Americans fell in love with the Humvee, with celebrities like Arnold Schwarzenegger buying them for private use, where it became known as the Hummer. Its growing popularity prompted GM to buy the rights to the Hummer brand in 1999.

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Over the following years, GM expanding the Hummer lineup beyond the original H1 to include the relatively smaller H2 (based loosely on the Chevy Suburban and Silverado) and the H3 (based on the Colorado pickup). That all came to an end in 2009 when GM declared bankruptcy and shut down the Hummer brand (together with Saturn and Pontiac). All the while, AM General continued producing Humvees for military use in the US and abroad.

The company has since expanded its civilian-vehicle activities, developing the wheelchair-accessible MV-1 and assembling the R-Class on contract from Mercedes-Benz (which has since concluded). But its military contracts account for the bulk of its business.

Last year, AM General secured a $550-million deal with the Pentagon to supply Humvees for export. It signed another, potentially worth $800 million, to produce Humvee-based ambulances for the US Army.

Contracts like these could make AM General attractive not only to General Motors, but to other automakers and defense contractors. Among other potential buyers cited by Reuters is Fiat Chrysler, whose Jeep brand shares a common history with AM General. Even if a mainstream automaker like GM or FCA were to buy the company, though, we wouldn't count on it bringing any new civilian derivatives to market in the foreseeable future.

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