General Motor’s return to defense pays off despite COVID-19 obstacles, says GlobalData

Following the news that General Motors Defense was awarded a contract from the US DoD for the new Infantry Squad Vehicles (ISV);

Stelios Kanavakis, Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the latest development:

“News that GM Defense was awarded a US$214.3m contract to produce new infantry squad vehicles that will equip the Infantry Brigade Combat Teams (IBCT), shows that US is continuing its procurement programs and actively supports the industry despite the COVID-19 obstacles.

“Besides reaffirming Pentagon’s commitment to support the defense industrial base amid the pandemic, it has been an opportunity for another civilian-based platform to be acquired from the Army. The vehicle is based on the Chevrolet Colorado ZR2 and 90% of its parts are commercial-off-the-shelf. That means important economies of scale, improved availability rates and ease of maintenance even when overseas, reduced production costs and benefits from GM’s R&D investments which reached US$6.8bn in 2019.”

“Most importantly, it marks GM’s return in the defense market after 16 years with a big success. The company is capitalizing on its potential from the civilian domain and opens up the way for new opportunities by offering its solutions in upcoming DOD projects the fields of autonomy, unmanned ground systems, electrification and batteries, to name a few. Although the revenues of a civilian vehicles’ manufacturer are far bigger than those of military vehicles, there are opportunities for joint projects, joint ventures or further consolidation of the market to take advantage of the economies of scale.

“With regards to the ISVs, they are not a replacement of another vehicle. Instead, they will further enhance the capabilities of motorized platoons and squads with an additional type of platform that will provide them with mobility over difficult terrain, speed and, the ability to carry more equipment and firepower. The contract could work as an example for other military forces, especially NATO members, to initiate relevant procurement programs for their high-readiness forces”.

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