Mercedes-Benz moves R-Class output to AM General

Mercedes-Benz has made a deal with AM General, a contract builder probably best known for having made the Army's Humvees a generation ago, to produce its big R-Class utility vehicle.

The move will free up space at Mercedes' Tuscaloosa, Ala., plant for production of the new GLE coupe, and M and GL-Class models, the German automaker said Tuesday.

R-Class production will begin at AM General's plant in Mishawaka, Ind., this summer. The R class is sold in the Chinese market only. Launched in early 2005, Mercedes-Benz stopped selling it in the U.S. in 2012.

"With the introduction of the new GLE Coupé and the ongoing strong demand for SUVs, Tuscaloosa needs all available production capacities for this segment," said Jason Hoff, president and CEO of Mercedes-Benz U.S. International.

AM General, formerly a subsidiary of American Motors, has experience as a contract manufacturer. The company began design work in 1979 on the Humvee, a military off-road vehicle. In 1992, AM General began production of civilian versions of the Humvee, the Hummer.

In December 1999, AM General and General Motors agreed to cooperate on marketing and distribution opportunities for the Hummer. GM acquired the Hummer brand.

In 2010, GM dismantled the Hummer brand, after inventory dwindled and Hummer dealerships began closing. The last Hummer H3 was assembled in Shreveport, La., on May 24, 2010.

AM General's Mobility Ventures designs and produces the MV-1, a universally accessible vehicle for handicapped people and paratransit fleets. The plant is able to make 70,000 vehicles a year, including the additional R-Class production, said AM General spokesman Jeff Adams.

"AM General is pleased to have been selected by Mercedes-Benz to build this vehicle at our world-class commercial vehicle facility in Mishawaka. We look forward to a long term relationship with Mercedes and expanding our services to the U.S. and global auto industry," said Charlie Hall, President and CEO of AM General.