GM goes on offense in defense industry - The Detroit News

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Kalea Hall The Detroit News

Published 11:12 PM EDT Sep 9, 2020

Detroit — A startup unit inside General Motors Co. is pushing to leverage the prowess of its parent company to get back into the defense business 17 years after the automaker left it.

The team of about 60 at GM Defense LLC is using GM technologies to develop products such as the rugged Infantry Squad Vehicle based on the Chevrolet Colorado that GM Defense is now building for the U.S. Army. The Army awarded a $214.3 million contract for the vehicles just a few years after the automaker's comeback in the business.

The revival of the defense business by Detroit's largest automaker, experts say, is a smart way for GM to grow its clout, recruit new customers, grow revenue to support new technology — and to bolster GM's technical cred.

"The benefits are these can be lucrative contracts. It also gives GM sort of another space to explore different technologies and how to put things together a little bit differently because the requirements for those vehicles are going to be more exhaustive than for regular vehicles," said Stephanie Brinley, a principal automotive analyst at IHS Markit.

"It enables them to support some programs and learn a little bit more about how far you can push a vehicle, how you can beef up certain aspects of it and make money while doing it."

The automaker sold its defense business in 2003 to General Dynamics after decades of supporting what was once known as the "Arsenal of Democracy." In World War I, GM directed 90% of its truck supply to the war effort. And during World War II, more than 100 GM plants were converted to produce weapons totaling $12 billion in 1945 dollars, according to GM Defense.

GM formed GM Defense in 2017 after partnering with different branches of the military on different power and propulsion projects. The automaker developed and tested a separate vehicle — the Chevrolet Colorado ZH2 fuel-cell truck — in partnership with the U.S. Army. It provided automotive hydrogen fuel-cells to power unmanned undersea Navy watercraft.

"When we looked at the defense industry, we had a realization of how our technology and equipment and scale could really benefit the Department of Defense and other government agencies," said Pam Fletcher, GM's vice president of global innovations.

Jeff Ryder, GM Defense vice president of growth and strategy, said the ZH2 prototype "captured people's imaginations to say: 'What else could we be doing?'" Though just a prototype, ZH2 was quiet and did not give off heat that might betray its presence. The fuel cells offered better range than batteries. As a bonus, they make water on board and can be used to plug in electric tools.

"Because GM is spending about $7 billion a year in commercial R&D on those technologies ... that's an asset that we take into government markets, and the trick is how to leverage that," Ryder said.

In the case of the Infantry Squad Vehicle, GM Defense took the architecture of the Chevrolet Colorado midsize truck and created a light and agile all-terrain vehicle that can carry a nine-soldier squad. They are powered by a 186-horsepower, 2.8-liter Duramax turbo-diesel engine, with a six-speed automatic transmission. Most of the parts are commercially available, including Chevrolet Performance suspension components.

The five-year Army contract covers the production of the first 649 vehicles, but the Army wants to eventually have 2,065 Infantry Squad Vehicles.

Ricardo Defense will provide logistics and fielding requirements for the infantry squad vehicles. GM Defense and Ricardo previously partnered together after the U.S. Army awarded three $1 million contracts for prototypes.

GM Defense has won military contracts before, but winning the U.S. Army Infantry Squad Vehicle contract is "the first one that really puts us on the map," Ryder said. "It's important because it's big, and it's important because we proved we could beat entrenched competitors."

Obtaining the contract gives GM Defense the credibility to compete for more and its parent company the opportunity to showcase its technological capability. The defense team is investigating possibly competing for contracts on the U.S. Marine Corps' Advanced Reconnaissance Vehicle program, the Army's Joint Light Tactical Vehicle program and aspects of the Army’s Robotic Combat Vehicle family of vehicles.

GM Defense is continuing to explore the potential for fuel-cell vehicles on the battlefield. Right now, though, the team is focused on finishing the first delivery of Infantry Squad Vehicles due in October. Though built in southeast Michigan now, production will shift to Concord, North Carolina next year. About 20 salaried technicians will build up to 14 per month.

GM, meanwhile, is pushing aggressively on the electric vehicle front and developing partnerships to help it move forward, announcing Tuesday an alliance with Nikola Corp. That startup plans to use GM's Ultium battery system and Hydrotec fuel-cell technology in its products.

GM will engineer, validate and manufacture the Nikola Badger truck. In exchange, Nikola is giving GM $2 billion in stock representing an 11% stake in the company. GM also recently announced an enhanced partnership with Honda Motor Co., which like Nikola is using GM's electric platform with its new Ultium batteries.

GM has an ambitious growth plan for GM Defense, Fletcher said, "but we feel we have every ability to make that growth trend come true." 

"In the past, it was all about adding extra armor. Today with everything going smart, you need that armor, but just as importantly, you need the smarts behind that armor," said Michael Dunne, a former GM executive who heads Hong Kong-based ZoZo Go LLC, an auto industry consultancy.

"I can imagine that (the defense industry) is really promising for GM to explore. I'm surprised that it hasn't happened earlier."

khall@detroitnews.com

Twitter: @bykaleahall 

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