From pickups to idle plants, automakers seek lifeline from defence boom
XLY•Automakers are pursuing military vehicle contracts and selling underused factories as Western defence spending rises, though executives and analysts say the opportunities are unlikely to materially boost revenue. GM expects its defence division to generate $700 million this year and grow 30% annually for several years.
1. Military vehicle bids
Ford, GM and Jaguar Land Rover are bidding for a £900 million ($1.2 billion) UK Ministry of Defence contract initially covering 3,000 vehicles, using modified versions of vehicles they already make. Ford is bidding with its Ranger pickup, GM with retrofitted Chevrolet Silverados and JLR with its Defender.
2. Factories and suppliers
Stellantis plans to sell an idled Canadian factory to armoured-vehicle maker Roshel, while Volkswagen agreed to sell its Osnabrueck plant for a project with Rafael Advanced Defense Systems. Analysts said factory sales may be more practical than shifting car assembly lines to defence production; suppliers may also benefit because their production lines can be adapted with limited investment.
3. Limited revenue potential
GM expects its defence division to generate $700 million this year and grow 30% annually for several years, reaching about $1.5 billion in 2029—less than 1% of its forecast $185 billion group revenue in 2025. Renault plans to produce 1,000 military drones per month starting next year with Thales, while executives said vehicles remain automakers’ core business.
