Friday, November 17, 2021
GM Diesel lands $6B deal
By SHELLEY LAWSON, Free Press Business Reporter
GM Diesel's London-based defence division has landed the "holy grail of contracts."
The joint venture involving the company and Michigan-based General Dynamics Land Systems, will crank out 2,131 light-armoured vehicles for the United States Army at a cost of $6 billion Cdn.
The huge contract is the largest to be won by a London-based company.
"It's a heck of a contract and it will be one heck of a challenge," said Kevin McKittrick, GM spokesperson, who has called the project the "holy grail of contracts."
Mayor Dianne Haskett, reached at her new home in Washington, D.C., last night, was thrilled by the news.
"I'm so excited," she said. "I'm so glad the announcement came during my time as mayor.
"This is absolutely fabulous news for General Motors Diesel and for London. This could be a huge boon to the London economy."
Haskett plans to attend the army's news conference today in Washington, to announce the details.
While production will be shared between GM Defence and General Dynamics, production at the London plant will nearly double for the six years of the contract.
The joint venture involving GM's defence operations beat out 20 rival proposals.
GM has already hired 175 new employees and may hire more, particularly welders, said Bill Pettipas, executive director of GM Diesel.
But, with production at GM's London locomotive operations falling off, those employees will be used first to fill an additional shift on the defence side, said Pettipas.
GM's Diesel Division has a total of 2,700 employees in London, with about 1,200 in defence operations.
GM suppliers, several in the London area, will supply London and U.S. production to ensure identical vehicles.
"This is really amazing. I'd love to be a GM supplier," said Wayne Dunn, president of the London Chamber of Commerce.
"The spinoffs are just incredible," he said, pointing to the potential job creation at GM and its suppliers.
Every new job creates "spinoffs in all other sectors of the economy," he said.
"This could be the spark to ignite the fire. It potentially could spark a huge amount of growth," Dunn said.
In order to match input with it's 50-50 partner in the deal, Pettipas said GM will have to make more chassis for the armoured vehicles to equal the value of the more expensive 105-mm gun and turret being manufactured by General Dynamics.
GM will start delivery of the first 300 vehicles in about 10 months. The army will renew the contract every year for the next six years.
"I'm pretty happy. This is really a wonderful win for us. It really proves the product," said Pettipas.
It's the first time the U.S. army has purchased wheeled armoured vehicles and it could mean more business for GM in the U.S. and other nations, said Pettipas.
"The U.S. army is a very influential factor with other armies around the world."
LAV III SPECIFICATIONS
- The London-built LAV III is a full-time four-wheel drive, selective eight-wheel drive, armoured vehicle weighing 17.24 tonnes.
- It can travel 100 kilometres an hour on the highway and go 500 kilometres before refuelling.
- It can be operated by a two-person crew and carry an additional nine soldiers.
- The armour protects the crew and passengers from machine-gun bullets, mortar and artillery fragments.
- Armed with a 105mm cannon and mortar carrier with a 120mm mortar.