General Motors Clinches $223M Lucrative U.S. Army Contract
General Motors Company GM recently announced that its subsidiary GM Defense (GMD) has secured a firm-fixed-price contract worth $222.9 million combined to manufacture the firm’s infantry squad vehicle (ISV) offering and facilitate initial deliveries of the platform to the U.S. Army.
The initial term pays $214.3 million to acquire the company’s ISV platform, along with installation kits, hardware and logistics services. GMD has also secured a separate $8.6-million award for the initial delivery of ISVs and advanced vehicle support facilities.
GMD has confirmed that the contract is for the first batch of 649 such vehicles, while the total authorized target for the next decade is for 2,065 vehicles. Distribution of the first 649 will occur over the next five years, and 1,070 over the next eight years. Notably, under the first contract, GMD will conduct work through Jun 24, 2028, and the second through Jun 24, 2021.
ISVs are an integral aspect of the U.S. Army's requirements for the rapid transportation needs of a small contingent of troops. GMD describes its ISVs as devices capable of assisting accelerated ground movement, as well as being compact and flexible enough to move a squad of nine across a battlefield. All ISV models of GMD will be fitted with an occupant and cargo superstructure powered by a 186-horsepower, 2.8L Duramax turbo-diesel engine built on the mid-size truck Chevrolet Colorado ZR2, using 90% of industrial off-shelf components.
Meanwhile, General Motors is also focusing on electric and autonomous vehicle development to adapt to the changing dynamics and customer preferences. The top U.S. carmaker aims to spend more than $20 billion through 2025 to launch the gen-next EVs powered by new low-cost batteries. This is likely to bolster the firm’s long-term prospects. The production timings of key launches like the GMC Hummer EV, Cadillac Lyriq crossover EV and Cruise Origin AV are on track and will likely boost the firm’s long-term prospects.
Zacks Rank and Other Stocks to Consider
General Motors currently carries a Zacks Rank #2 (Buy). Shares of the company have appreciated 32.3%, year to date, compared with the industry’s rise of 29.3%.
Other top-ranked stocks are Niu Technologies NIU, Tesla TSLA and AngloGold Ashanti Limited AU, each carrying a Zack Rank of 2, at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Shares of Niu have surged 91.4% year to date, as against the industry’s decline of 12.2%.
Shares of Tesla have soared 167.6%, year to date, compared with industry’s rise of 44.5%.
Shares of AngloGold have appreciated 32.3%, year to date, compared with industry’s rise of 29.3%.
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