When a HUMMER won't do

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In the past, politicians and rock stars fed the urban armoured car business.
But with security fears on the rise, so is demand
Aug. 25, 2006. 07:00 AM
TONY WONG
BUSINESS REPORTER

It can stop a bullet from an AK-47, shrug off a roadside bomb, and it makes a Hummer look like a chick car.

The $200,000 (U.S.) Gurkha is coming to a road near you - thanks to a King City-based company that is finding itself in demand because of the global war on terror.

"They are pretty awesome machines," says William Whyte, owner of Armet Armored Vehicles Inc., the company that builds the Gurkha. "We've been stopped on roads with people taking pictures and wanting to know what they are."

The Gurkha can go more than 150 kilometres per hour - plenty fast for a military vehicle - and is the highest level of protection you can get next to sitting in a tank, Whyte says. It certainly looks fierce enough.

The squat 8,620 kilogram vehicle looks every bit the ticked-off hedgehog, bristling with testosterone and armour plating.

Whyte says the first 40 have been built this year for delivery to the Canadian and the American military in the Middle East. The first civilian delivery is for a "well-known personality" in California that will take place next month, Whyte says. The customer, who is a friend of California governor Arnold Schwarzenegger, intends to use it as daily transport, Whyte says. "It's a very California mentality to have the biggest and the best."

It's also in the spirit of one-upmanship. Schwarzenegger was the first civilian to take ownership of a Hummer military vehicle - which most famously kick-started sales of the armoured car.

Whyte is likely hoping for a similar halo effect, especially since the Gurkha is also slated to star in a Discovery Channel Europe documentary to be released later this year.

The privately owned company, the largest armoured car manufacturer in Canada, will not give out sales figures, but says over the last three years it has opened three more offices including the Middle East, England and Malta to deal with demand.

And they've got company - the armoured business has seen renewed interest with every potential terrorist threat. Calgary-based Ceramic Protection Corp.'s shares jumped 8 per cent in one day last week when it reported their biggest gain in three months due to the soaring demand for ceramic vehicle and body armour.

And the calls have been coming, most recently after the arrest of 24 young men by British police in an alleged conspiracy to hijack planes headed to the United States, which has snarled air traffic worldwide. In June, Canadians were shocked at the arrests of 17 men and youths in Toronto who are accused of planning a terrorist attack in southern Ontario. Police allege the Toronto Stock Exchange was a target of one of the attacks.

"It's not just heads of state or politicians who are asking for security - it could be anyone today," says Chris Pecalevski, of Armet competitor Inkas armoured vehicle manufacturing in Toronto.

In addition to military vehicles, a whole new market is emerging in acquiring armoured cars that look like everyday cars for business executives who care about security, Pecalevski says.

"A few years back, the only people really buying personal armoured cars were rock stars, rap stars, or divorce lawyers," Whyte says. "But that's been changing since 9/11 and the latest problems we've been having."

Unlike the over-the-top Gurkha, likely to find a niche among celebrities who crave a bling factor, most clients want discreet armour so as not to tip off potential assailants, Pecalevski says.

In one corner of the Inkas factory in an industrial unit in West Toronto, two men are applying steel plating to the bottom of a black Chevrolet Suburban. The van has been stripped clean. Kevlar will be added to the sides and bulletproof glass and run flat tires will be added later.

The Suburban, which is for a client in Los Angeles that shuttles celebrities to events, will take three weeks to build and cost more than $85,000 (U.S.), at least $50,000 more than a standard van.

Adding options, of course, can add substantially to the cost, with everything from gun ports for $500 each to a bigger engine and suspension.

Whyte, who has a contract to armour-plate Russian government vehicles in embassies around the world, including Canada, says 99 per cent of his business is done abroad. But non-traditional customers are also paying attention to the need for more security, he says.

"The next stage in terrorism is to determine whether there is global risk for executives of large corporations who may be targets of terror and how to protect them," says Whyte, a former Metro Toronto Police officer who served on the Emergency Task Force. The company also works on armoured vehicles for Metro and Peel Police forces.

Still, both Whyte and Pecalevski say that, while they are getting more inquiries from Canadians, the majority of their customers are overseas.

"If you're a big celebrity in Canada, your biggest problem might be signing autographs," Pecalevski says.

The company's Canadian customers are typically executives who have to travel abroad. One Toronto-based customer who does business in Latin America uses an Inkas armour plated sedan while on business for fear of kidnapping. The company can armour-plate virtually any car. Big Mercedes S class sedans are a favourite with CEOs, though Chrysler's 300C sedan is becoming popular.

"It's the cost of doing business in some countries," Pecalevski says. In some parts of the Middle East, having armoured protection is not an option.

In Iraq, for example, there is a large demand from firms that provide security and transportation for civilian contractors who are rebuilding the country's infrastructure.

What has kept the armoured companies in business is that insurgents have targeted and developed ways to defeat traditional armoured cars.

When they first arrived in Iraq, most contractors used SUVs such as Chevrolet Suburbans or Ford Excursions that were armour plated to transport passengers, Whyte says.

"But then they became a target - they stuck out like a sore thumb especially since they were American made and were usually in white."

Many contractors are now using used cars that are armour plated in an effort to be low-key, he said.

"Contractors are seen as an easy target, so they go after them quite aggressively," Whyte says.

Another problem that soon became evident in vehicles bound for Iraq was that some of the armoured cars were good for ballistic protection such as bullets, but were useless for blast protection such as roadside bombs.

Insurgents in Iraq are now using a new roadside projectile bomb called an "explosively formed projectile" or EFP that can penetrate four inches of armour from a distance of 300 feet. The device can be triggered by an infra-red remote similar to a garage door opener.

"The stakes keep getting higher, so you have to keep one step ahead," says Whyte, who concedes there is some irony that one of the world's biggest armoured car manufacturers is in Canada - known as a country of peacemakers.

While he says a skilled labour force and competitive dollar haven't hurt his growth, a soaring loonie has put a crimp in the bottom line for many exporters.

It helps the Gurkha can also be shipped overseas as a "build anywhere" kit since it uses existing chassis and engines from other manufacturers and can be assembled using local labour.

Still, there is so much demand for protection overseas, most reputable companies are at full capacity. Whyte doesn't give out numbers, but Pecalevski says his company armours four to six vehicles per month.

But it's not just the after-market that has been trying to profit from the lucrative niche market.

Mercedes Benz sedans, which seem to be a favourite with clients ranging from Fortune 500 CEOs to foreign dictators, offer a bullet-proof version. However, that option box won't be able to be ticked off in Canada since the car isn't imported here, according to a spokesperson for Mercedes Canada.

In 2004, Ford Motor Co. introduced a armoured version of its Lincoln Town Car that was also available in Canada but only by special order.

"Obviously a lot of politicians and dignitaries use the Town Car, so that's why it was offered on the market," said Christine Hollander, national product manager for Ford Canada.

The car did not look any different than a traditional Town Car but it was equipped with high-impact ceramics and glass, aramid fibre and a modified fuel tank. Hollander says she is unsure if any sold in Canada. The product was discontinued in 2005.

One reason could be because the car sold for $140,000 (U.S.), or a staggering $100,000 more than a standard U.S.-built Town Car. Having a Lincoln that looked virtually identical to an airport taxi, but costing $100,000 extra may not have sat well with some customers.

The 2007 Town Car is still available in Canada with a limousine package and even a hearse package, but not with the bullet proof option, Hollander says. "I guess it was not something that was in great demand here."