The payoff is the right to help the Army replace its 100,000-vehicle fleet of aging light tactical vehicles. Sales to other federal agencies are possible, Skalny says. Many of the Army's HumVees, built by AM General, will be older than their drivers by 2010.
In December, Congress added $14 million to the fiscal 2002 defense budget to help the Army's National Automotive Center in Warren, Mich., accelerate development of hybrid-electric technology with automakers. The center manages the Army's 21st Century Truck program, near General Motors' sprawling Technical Center in Warren, Mich.
The U.S. auto industry stands to gain as the U.S. military undergoes a transformation by the Bush administration to create weapons systems that are lighter and easier to deploy.
For its part, the Army wants to marry new automotive technologies, such as hybrid power and new vehicle suspensions. Hybrids promise better fuel economy and can provide the battlefield with the electric power the Army needs.
DaimlerChrysler understands the profits from military sales. It sells a range of military vehicles, from small desert patrol vehicles to those with 90 tons of carrying capacity to governments worldwide. In December, the company displayed its military version of the Dodge Ram 2500, the Dodge Ram COMBATT, at the Washington auto show.
The Commercially Based Tactical Truck, or COMBATT, program takes military technology and installs it on commercial light trucks.
The DaimlerChrysler program is further ahead, a source says, because it has made a business case for a severe-duty diesel-electric civilian-model Ram that is aimed at the mining, logging and construction industries. Off-the-shelf vehicles from the auto industry often are cheaper than unique military vehicles.
DaimlerChrysler expects that a hybrid system would add $3,000 to $5,000 to the cost of a Ram, spokesman Stuart Schorr says. Volume and price plans for its civilian DaimlerChrysler model were not disclosed.