AM General seeks incentives for expansion amid bid protest
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South Bend-based AM General is requesting tax abatements from the St. Joseph County Council as part of an approximately $70 million expansion of its manufacturing plant in Mishawaka. The company says a recently-awarded contract from the U.S. Army to build Joint Light Tactical Vehicles (JLTV), a heavily armored truck, necessitates the growth.
The deal is worth up to $8.6 billion over the next decade for up to 21,000 JLTVs and 9,800 corresponding trailers. It could create more than 300 manufacturing jobs.
However, AMG is facing pushback from the original designer and manufacturer of the JLTV, Wisconsin-based Oshkosh Defense, a subsidiary of Oshkosh Corp. (NYSE: OSK). In 2015, the Army awarded a nearly $7 billion contract to Oshkosh to begin manufacturing JLTVs.
Oshkosh has filed a formal bid protest with the U.S. Government Accountability Office over the U.S. Army’s decision to award the contract to AM General.
“After participating in the government’s post-award debriefing process, we have significant concerns regarding the evaluation of the proposals under the solicitation that support an independent review,” said Tim Bleck, president of Oshkosh Defense and a senior vice president of Oshkosh Corp.
In a statement, Oshkosh said it believes the government’s evaluation “did not properly review the financial, technical, and manufacturing capabilities offered to select the best value and lowest risk solution to deliver the JLTV.”
Oshkosh said it has the experience and necessary production infrastructure to continue building the JLTV.
Meanwhile, AM General has continued to proceed with the project, despite the bid objection. CEO Jim Cannon told the Rotary Club of South Bend on Wednesday it is not as of yet under a “stop work order.”
The company has broken ground on the expansion, and on Tuesday went before the county council with the tax abatement requests. The abatement schedule and percentage model is still being finalized.
“The direction we have had from AM General is that they will continue forward with their expansion plans while the contact challenge process moves forward under a separate path,” said St. Joseph County Economic Development Executive Director Bill Schalliol in a statement to Inside INdiana Business.
Schalliol says the resolution for the incentives passed out of committee favorably. He anticipates final approval on May 9.
Schalliol also told WNDU-TV he does not want to see delays in building permits, as AM General is under a tight deadline. The contract calls for the first JLTV units to roll-off the Mishawaka assembly line in March 2024.
Editor’s Note: A previous version of this story indicated the company was seeking $70 million in incentives. That figure is for the company’s investment in the expansion.