AM General Cancels Contract to Supply New JLTV Armored Vehicles to US Army

AM General CEO John Chadbourne issued a public statement in defense of the JLTV A2 tactical vehicle production program. This move came in response to the threat of funding cuts by the US Congress, as well as the Marine Corps’ decision to begin searching for an alternative supplier for the vehicle.

The CEO’s statement came as the US House of Representatives’ Defense Subcommittee prepared to cut $133 million from the Marine Corps’ proposed budget for JLTV A2 procurement for fiscal year 2027, according to Defence Blog. The military’s total request was $245 million.

Lawmakers justified the funding cut by noting that the program is more than 20 months behind schedule, and there is a backlog of approximately 2,000 vehicles.

As a result, the US Marine Corps had already suspended procurement of these vehicles in the 2026 budget to give AM General time to catch up.

The situation has jeopardized a large-scale contract worth $8.66 billion.

The JLTVs are being procured by the US Army and the Marine Corps to replace the aging HMMWV armored vehicles. The latter proved vulnerable to improvised explosive devices (IEDs) during military campaigns in Iraq and Afghanistan—a threat they were not originally designed to withstand.

The new JLTV weighs about 6,350 kg, which is nearly twice the weight of the HMMWV. At the same time, the vehicle can reach speeds of over 160 km/h and has 70% better off-road capability thanks to its independent suspension.

The contract to manufacture the JLTV was initially awarded to Oshkosh Defense in August 2015; the company produced over 24,000 vehicles before the US Army announced a new tender in 2023. AM General won this competition, securing a five-year contract with an extension option to produce more than 20,000 vehicles.

According to John Chadbourne, the delays were due to the poor condition of the inherited technical documentation, the need for design revisions, and issues with suppliers. The company had to process over 2,100 change requests and qualify entirely new component suppliers.

The new variant, designated A2, features over 250 engineering improvements to enhance reliability and reduce operating costs. The main design change was the integration of lithium-ion batteries, which allow the vehicle to power its onboard systems even when the engine is off.

Despite the engineering improvements and the approximately $2 billion that AM General has already received under the contract, the US Department of Defense has yet to accept a single production vehicle of the A2 version. This has forced the Marine Corps to seek a second supplier, and Oshkosh Defense has already announced its readiness to quickly fill this need.

AM General’s management expects to reach full production capacity in early 2027, while continuing to support the government’s testing program.