WASHINGTON — Private-equity firm KPS Capital Partners acquired Humvee-maker AM General last year, and now the South Bend, Indiana-based vehicle maker has a new chief executive.
Jim Cannon took over in late September. He previously was CEO of FLIR Systems, a company focused on sensors and unmanned systems recently acquired by Teledyne Technologies.
AM General is known for its iconic Humvees but is setting its sights on future opportunities as the U.S. Army, other U.S. military services, and international partners and allies look to modernize their forces.
Defense News sat down with Cannon in a recent interview at the Association of the U.S. Army’s annual conference to talk about his plans for the company.
This interview was edited for length and clarity.
AM General was acquired about a year ago. Tell me about the firm that acquired you and how the sale is affecting the company.
KPS is a private-equity firm that focuses on great American companies. It is pro-union, they partner with the union to create jobs and they really specialize in manufacturing companies. Really unique in the world of private equity in that they are not afraid of hardcore industrial companies.
What is your background?
Before this job, I was the CEO of a company called FLIR Systems. We made defense technologies. This past May, we reached an agreement to merge with Teledyne. Before that, I worked for a long time at Stanley Black & Decker, a tool company. Nobody uses more tools than the U.S. Army.
But before that, and the thing I’m most proud of, I was a soldier for a little over a decade and it was the best job I ever had. I was an infantryman in the 24th Infantry Division and served in the first Gulf War — Desert Shield, Desert Storm — and then I became an armor officer in Germany in the ‘90s during the Bosnian missions.
How is your strategy for AM General taking shape?
We have a pretty clear task, and that’s to grow the business. We have a purpose that I think everybody here shares in and that’s to ensure our soldiers have overmatch on the battlefield. Industry has a part to play; we need to innovate, we need to change the way we think and we need to move quickly. That’s first and foremost.
We want to be purpose-oriented in what we do internally. We say this is for “Sgt. Smith.” Sgt. Smith could be your son, daughter, could be your brother, sister, mom or dad. Many of us used to be Sgt. Smith. Sgt. Smith is going to take this equipment — they’re going to do a tough mission. Our purpose is their mission, and we need to have that kind of connectivity and make it personal to the warfighter.
As we go forward, AM General is known as the Humvee company and Humvees are an enduring platform. They’re going to be utilized for decades to come. The Humvee today is not the same Humvee that you had 10 years ago, 20 years ago, even five years ago. The suspension, the power train, the safety features, the capability, the skin may look very familiar. But a new Humvee today has capabilities unlike any of its predecessors. We’re going to continue to focus on the Humvee, of course. No. 1 rule of business: Keep the business you got.
But 2022 is going to be a watershed year for the light tactical vehicle industry. You’ve got [the Joint Light Tactical Vehicle competition] coming up. You’ve got the Common Tactical Truck competition coming up. We want to compete to win. We’re absolutely focused on shaping the conditions in 2022 to compete on those programs. There’s a need for competition in the industrial base.
Then what you see in the [AUSA] booth out here is new products and new channels. We’ve got the most significant new product that we’ve introduced really since the Humvee in a product out here called the NXT 360. It’s going to get a different name.
Tell me about why AM General developed the NXT 360 and how you plan to market and sell it.
It may look a little bit like a Humvee — that’s on purpose. But it has an armored compartment that’s got the kind of ballistic protection you get from a JLTV or a [Mine Resistant Ambush Protected vehicle] with a patented hull design with commonality as much as possible with other Humvee spare parts. So what’s that give you? It gives you the ballistic protection that you want in a lighter vehicle, that’s less expensive, that needs fewer incremental spare parts to keep it operating in the field. We think it’s pretty compelling.
There’s not a requirement for it right now, but this is what I think industry has to do. It has to innovate, show what’s possible to the warfighter and perhaps that shapes future requirements.
In the meanwhile, we’re going to continue to actively sell it through non-programmatic channels to allied partners, maybe special operations communities.
The vehicle was officially unveiled at the DSEI, [a London-based defense exhibition in September], and we’re beginning to have discussions now.
The JLTV competition is just around the corner. Tell me about your strategy going up against incumbent Oshkosh Defense after AM General lost the initial competition in 2015.
There are only a handful of companies making light tactical vehicles in the states. We’re one of them. We have a physical footprint and manufacturing muscle that is significant and right now significantly under-utilized. So 100 percent, we’re going to compete, we’re going to put the full weight of the organization behind it. We have new owners in KPS that want to win. There’s opportunities with seven technical inserts to do things a little bit differently, perhaps, than Oshkosh does.
Incumbency matters, it gives a lot of advantages. You could debate how fair recompetes are with the kind of incumbency advantage, but the bottom line is, there’s no reason why we shouldn’t win in my mind. For a living, we make light tactical vehicles. That’s what we do as a day job; it’s not like an extra thing we do.
You are working on soft recoil technology with the Army. How is that effort going?
It’s a really unique technology that eliminates 60 percent of the recoil from an artillery piece or a mortar and what that allows you to do is put a bigger weapon on a smaller vehicle. And so for deployability, expeditionary operations … you can carry more ammo — all the advantages that you would get by being able to put a bigger gun on a smaller vehicle.
We’ve taken a 105mm cannon, a howitzer, and put it on a Humvee and it’s called the Hawkeye. So the Army is taking a couple of Hawkeyes and they’re going to take them this winter and shoot them and really evaluate and test the technology. And then we’ll see what happens from there.
This is a technology [the Army] is considering along with a bunch of other things; we’ll determine exactly what that solution might be.
Jen Judson is the land warfare reporter for Defense News. She has covered defense in the Washington area for 10 years. She was previously a reporter at Politico and Inside Defense. She won the National Press Club’s best analytical reporting award in 2014 and was named the Defense Media Awards’ best young defense journalist in 2018.
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