INTERVIEWA: JIM ARMOUR
BEHIND THE WHEEL

By Louis Marroquin

CEO Jim Armour keeps things humming along at AM General.

Outsized and athletic, president and CEO Jim Armour is a lot like the Hummers manufactured at his AM General automotive plant in Mishawaka, Indiana. On first encounter, his 6-foot-5-inch frame can be a bit intimidating, but spend some time with him and you quickly realize that, with his drive for precision and his smooth handling, he’s just the kind of guy who can get you through even the toughest terrain. Most recently, Armour, a member of  Knollwood Country Club in South Bend, Indiana, was the driving force behind AM General’s development deal with General Motors, in which GM acquired exclusive ownership of the Hummer brand name worldwide and agreed to jointly develop future derivatives of Hummer 4x4 off-road vehicles.

The Hummer, which has been renamed H1, is the civilian version of the military High Mobility Multipurpose Wheeled Vehicle, or HMMWV (pronounced Humvee), and was first introduced to the public in 1992. Using the same body parts, but without the military trappings, and with several consumer-friendly flourishes thrown in, the Hummer emerged as the premier, high-end ($100,000 sticker price), four-wheel-drive vehicle, able to endure the exact off-road maneuverability that made the Humvee a hero during Desert Storm. Under the new agreement, Armour’s Indiana plant will manufacture a new H2 vehicle, essentially a scaled down H1 that, at half the cost, will fit nicely into today’s SUV-mad society.

Though the prospect of adding a facility that will produce 40,000 units when the H2 goes into production in 2002 might seem daunting to some of us — especially considering the plant currently manufactures about 1,400 H1 vehicles each year — Armour is unflustered by what lies ahead for his relatively small enterprise.

With his 4x4 mentality, Armour calmly approaches whatever rough roads may cross his path. After all, he has constructed quite a résumé in the automotive world on his way to AM General, having advanced through the management ranks at both Ford Motor Company and American Motors Corporation. But he affably admits that it was no grand scheme that got him where he is today, merely a “blessing.”

On the day that we met for this interview at AM General’s 375-acre test track, Armour leaned back, switched into interview gear, and took me on a verbal ride through the new deal, his career, and more.

What brought about the deal between AM General and General Motors?

What brought General Motors to AM General in the first place was the Hummer brand. Based on market research over the past several years, they’ve been watching — as other companies have been — how we’re doing with the brand. And their market research amazed them with how strong the Hummer brand name is, how well recognized, and how positive the attributes are that people attach to the name. It’s widely recognized that the vehicle is awesome off-road; it’s in a class by itself. No one else is even close.

GM came to us originally and they wanted the brand. We said to them that we’re in the manufacturing business, we’ll be happy to let you acquire the brand, but we want to do the work. Fairly quickly in the negotiations, we settled with GM that we would do the assembly, they would get the name and do the engineering, and we would provide input on the engineering, lessons learned, corporate knowledge of the Hummer, and what makes a Hummer really truly a Hummer.

What are some of the attributes that make a Hummer a Hummer?

The Hummer is the first and only four-wheel-drive vehicle designed and built focusing entirely on functionality, as opposed to form. It has to be able to climb a 22-inch vertical step fully loaded in forward or reverse. It has to be able to traverse tremendous obstacles, different types of terrain. It has to be very good in sand and on ice, in mud, on rocks. Originally, the military version was designed to keep up with the new tanks. The Hummer is designed to keep up with those vehicles, which it does. So it’s got exceptional ground clearance of 16 inches, it’s extremely stable, very safe, surprisingly agile, and easy to drive. Off the road all of a sudden it doesn’t feel too big. It’s actually a very nimble vehicle.

The deal specifically calls for the creation of the H2, but also for the development of future variants of the Hummer. Will AM General be involved with that as well?

We’ll be involved, but to what extent has not been discussed. We’ve concentrated only on H2. Our goal is to expand our relationship with GM over time. And being good business people, their response is, “Fine, we’d love to have you do that, but first do your job on H2.” We’ve got to prove ourselves, in other words.

What was your personal involvement in making the deal happen?

I was our lead negotiator. I’ve spent my career in the automotive industry. So I speak the same language as the General Motors people. I understand how a company like that designs vehicles, how they test them, how they do the marketing. Basically, I understand those large companies; I’ve worked for them. Most of our people are more focused on the military business, more focused on a company our size, or they know a lot about the U.S. government, U.S. Army, they’re ex-military.

The deal with GM calls for the addition of a new production facility exclusively for manufacturing the H2. What will that entail?

General Motors is loaning us the money for the plant. We’re going to spend in excess of $200 million, probably around $230 million, to put up a new factory. It’s going to be approximately 700,000 square feet. It’s going to employ approximately 1,500 people. And it’s going to be all-new construction designed specifically for this program.

Was the added employment to the area a major consideration when making the deal?

Yes, that’s why it’s such a large economic boom to this area. It provides 1,500 well-paying jobs for many years. And what makes it a win-win is that we’re adding these jobs and we’re also increasing the rest of the business. The military side of the business is growing again.

How will manufacturing the H2 complement the production of the military Humvees?

We’re going to triple the size of our work force on the manufacturing side. Our revenue and profits are going to grow aggressively. It will literally be like adding another company right beside our existing company. By and large, the two plants will run totally independent of each other.

What are some of the differences between the H1 and the H2?

The H2 will be somewhat smaller. But it will look like a Hummer; it will be a Hummer. The H2 will be best in class of anything other than H1. When a person wants the ultimate vehicle, wants to go where no one else can go, the H1 will still be there. Market research is showing that they’re probably two different buyers.

Who will buy an H2?

Successful people who are adventuresome, who are not afraid to show that they’re unique. People who have achieved success. They want what they want; they know what they want; and they know why they want it. The H2 will undoubtedly appeal more to women than the H1. Many women have fallen in love with the H1. My wife drives one every day; it’s all she wants to drive. It’s her vehicle. She has incredible Hummer stories.

Tell me one.

One of her favorite stories is when she stopped several months ago at a small, local hardware store. As she was driving up, a guy drove up in a Jeep Cherokee, and a few minutes later she was going up to the counter, and he was going up to the counter. So the person behind the counter came up and said, “Which one’s next,” and the fellow quickly said, “She goes first, she’s got the best 4x4.”

Will your wife be able to give up her H1 for an H2, or will she still want to drive that H1?

I don’t know. It’s going to be interesting.

Describe your management style.

I am very hands on, very detail-oriented, very people-oriented, very people-conscious. Every success that comes in business comes because of the people. So if one can’t focus the people, motivate the people, involve the people, then you can’t be successful. I am fortunate that at Ford and American Motors I was given unusual exposure — I worked in the engineering organization at both Ford and American Motors, and I moved around to a lot of different jobs. I’ve worked in the finance organization, the manufacturing and production organizations, the quality organizations, program management. The only area in the business I hadn’t worked in before I took this job was marketing. And now the CEOs are mostly marketing. Everybody wants to see the CEO; everybody wants to talk to and hear from the CEO.

How did you get into the automotive business?

Well, actually, I grew up in east Tennessee, south of Knoxville. I’m the son of tenant farmers, so I grew up a farm boy. When I got out of high school, I went to college for a year. I really didn’t know what I wanted to do, so I went into the Peace Corps. When I came out of the Peace Corps, I came to Detroit and lived with relatives and did various construction jobs. I worked as a line worker in a unionized plant, and through a church group got an application at Ford Motor Company.

I started at Ford Motor Company as a clerk, and Ford paid for my college education. I went to night school for 10 years, got three degrees. Between Ford and American Motors, they paid for me. It worked out great because I learned business as I was going to college and was able to put the two together. Coming from the farming background, all of this stuff was news to me, but I’ve taken to it, I guess, like a duck to water.

Was it an adjustment going to AM General, with its predominantly military production?

When I was offered a chance to come to South Bend to work for AM General, one of my daughters just really disliked the idea. She didn’t want to be involved in making things for war, and we sat down and talked about it. I remember saying to her, “Well, maybe you should think about the positive side of this. Our product will save the lives of soldiers, and it could be your brothers or it could be you, if you volunteered.” And that turned out to be very prophetic because we’ve heard countless stories where the capability of the vehicle, and the reliability of the vehicle, have saved countless lives.

Did it turn her around hearing that perspective?

Yes. She never has brought the subject up since then.

What do you like best about what you do?

The people. Involvement with people, the ability to have a positive influence on so many lives. Also, I am very comfortable making decisions. I don’t know how or why, but I am. I rarely look back over a decision. Once I’ve made it, I’ve made it. We just move on.

What do you like least?

Stress. When I took over this company in the late ’80s, it was in very serious financial trouble. One of the first things we had to do was lay off more than half the work force throughout the company. We literally had to take the company apart and rebuild it. We very quickly turned it around. Within weeks, we were profitable, barely but profitable. Then we began, in the early ’90s, to make a very strong profit. There have been times when the future of the company was very uncertain, and that’s more responsibility than anyone really wants to carry around.

What would people be most surprised to know about you?

Most people who don’t know me are surprised by how people-oriented I am. They don’t know that I come from such a poor background. Years ago, when I had a job like this and I was much younger, people just looked at me and assumed I was born with a silver spoon in my mouth. They would have no idea that I’d ever really come up through the ranks, I mean big time. I don’t think most of the employees here understand why I relate to them so well. They just know I do.

The people who know me work-wise would be surprised how goofy and fun-loving I am because they see me in this serious mode all the time. And I’m still a kid at heart when I get a chance to be a kid at heart.

JIM ARMOUR
Occupation: President and CEO of AM General in Mishawaka, Indiana.
Residence: Granger, Indiana.
Club Membership: Knollwood Country Club, South Bend, Indiana.
Family: Wife, Maryann; four children; nine grandchildren.
Education: Associate degree in business and arts, and bachelor’s degree in finance from Wayne State University in Detroit; MBA from the University of Detroit.
Military: Public service as a project leader for the Peace Corps.
Hobby: The ultimate off-roading — boating.