Humvee Armor Maker Awaits a Pentagon Order

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Armored Holdings, the only maker of armor for Humvees, said it recently expanded its manufacturing capacity 20% in anticipation of Pentagon orders. But those orders have yet to materialize as the Pentagon has spent only $415 million of the $1 billion it allocated to improving and increasing the armor on Humvees so far this year.


“This is the fault of the Army’s bureaucracy, pure and simple,” said Friedman, Billings, Ramsey analyst Michael Hoffman. Armor Holdings has expanded its plants and brought on extra workers to meet the anticipated demand, he said, but so far, it’s been a waste of time and capital for both the company and its shareholders. Moreover, the margins on these contracts typically do not recoup the expense of prolonged downtime, he said. Mr. Hoffman declined to speculate on what the margins for this particular contract might be.


Armored Holdings told Bloomberg News it could manufacture an additional 100 fully armored vehicles – to 550 from 450 – per month. Less than one year ago, the company was reportedly making only 60 vehicles per month.


Nearly half of the 10,800 casualties sustained in Iraq have reportedly been due to attacks on the vehicles.


A call to an Army spokeswoman with the Weapons Environment and Technology team was not returned.


The slow pace of Humvee armor upgrading came under the national spotlight when Defense Secretary Donald Rumsfeld was questioned about the matter at a troops-only “Town Hall” meeting in Kuwait on Tuesday. Asked why troops are forced to improvise armor for their Humvees, Secretary Rumsfeld replied, in part, “You go to war with the army you have.”


It now appears the question – seized upon by many Democrats and left-leaning commentators as proof of the administration’s failure to plan for the prolonged Iraqi insurgency – was planted by a Chattanooga Times Free Press reporter embedded with the 278th Regimental Combat Team.


The commander of the American forces in Iraq, Lieutenant General Steve Whitcomb, said in a press briefing yesterday that American forces currently have approximately 20,000 Humvees in use in Iraq, 6,000 of which are now fully armored. A fully armored Humvee with ballistic glass will deflect most small-arms fire and rocket-propelled grenades, but is still susceptible


to land mines detonating directly underneath its carriage. Troops in areas of Baghdad and the Sunni triangle have taken to adding half-inch-thick steel plating to the floor of their vehicles to guard against roadside bombs.


At the current level of 450 vehicles per month, Mr. Hoffman said Armor Holdings will have completed the Pentagon’s initial request for 8,100 “up-armored” Humvees in Iraq by March and meet its longer-term goal of having 12,000 fully armored vehicles in the country by the end of the year. However, the heightened political scrutiny would probably force the Pentagon to expand the order, he said. “Since they seem to be the prime target for the Iraqis, I don’t think the public or Congress will find it acceptable to have a target of only 60% of the Humvee fleet fully armored.”


The House Armed Services Committee has not been able to find out why the Pentagon has not fully spent the money, said a committee spokeswoman, Carrie Sloan. She said the committee, acting on requests from members who have constituents in Iraq, sent investigators to Armor Holdings and determined that it wasn’t the company’s fault that production is still slow. She said the Pentagon has assured the committee it’s on target to have a fully armored Humvee force in place within a year.


The Pentagon has until September 30 – its fiscal yearend – to spend the balance of the $1 billion or the money is returned to the House Appropriations Committee, she said.


The Pentagon has been allocated $1.3 billion for force protection measures, $1 billion of which is targeted for improving the Humvees’ armor. Of that $1 billion, $750 million is for new vehicles and $250 million is for kits that are added on to regular Humvees to fully armor them.


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