General Dynamics - General Dynamics Information Technology

General Dynamics Corporation is an American aerospace and defense multinational corporation. Formed by mergers and divestitures, it is the world's fifth-largest defense contractor based on 2012 revenues. General Dynamics is headquartered in West Falls Church, Fairfax County, Virginia.

The company has changed markedly in the postâ€"Cold War era of defense consolidation. It has four main business segments: Marine Systems, Combat Systems, Information Systems Technology, and Aerospace. General Dynamics' former Fort Worth Division manufactured one of the Western world's most-produced jet fighters, the F-16 Fighting Falconâ€"until 1993, when production was sold to Lockheed. In 1999, the company re-entered the airframe business with its purchase of Gulfstream Aerospace.

History

Electric Boat

General Dynamics traces its ancestry to John Philip Holland's Holland Torpedo Boat Company. This company was responsible for developing the U.S. Navy's first submarines built at Lewis Nixon's Crescent Shipyard, located in Elizabethport, New Jersey. The revolutionary submarine boat Holland VI was built there, its keel being laid down in 1896. Crescent's superintendent and naval architect, Arthur Leopold Busch, supervised the construction of this submarine. After being launched on 17 May 1897, it was eventually purchased by the Navy and renamed USS Holland (SS-1). The Holland was officially commissioned on 12 October 1900 and became the United States Navy's first submarine, later known as SS-1. The Navy placed an order for more submarines, which were developed in rapid succession and were assembled at two different locations on both coasts. These submarines were known as the A-Class or Adder Class, and became America's first fleet of underwater c raft at the beginning of the 20th century.

Holland grew short on funds, due to the lengthy and expensive process of introducing the world's first practical submarines, and he had to part with his company and sell his interest to financier Isaac Leopold Rice, renaming the new firm as the Electric Boat Company on 7 February 1899. Holland effectively lost control of the company and found himself earning a salary of $90 a week as chief engineer, while the company that he founded was selling submarines for $300,000 each. Holland resigned from the company effective April 1904. Rice became Electric Boat's first President, remaining there from that time until 1915 when he stepped down just prior to his death on 2 November 1915.

Electric Boat gained a reputation for unscrupulous arms dealing in 1904-05, when it sold submarines to Japan's Imperial Japanese Navy and Russia's Imperial Russian Navy, who were then at war. Holland submarines were also sold to the British Royal Navy through the English armaments company Vickers, and to the Dutch to serve in the Royal Netherlands Navy. The new pioneering craft originally developed by the company was now legitimized as genuine naval weapons by the world's most powerful navies.

In the post-World War II wind-down, Electric Boat was cash-flush but lacking in work, with its workforce shrinking from 13,000 to 4,000 by 1946. Hoping to diversify, president and chief executive officer John Jay Hopkins started looking for companies that would fit into Electric Boat's market.

Canadair purchase

Hopkins quickly found that Canadair, owned by the Canadian government, was suffering from similar post-war malaise and was up for sale. Hopkins bought the company for $10 million in 1946. Even by the Canadian government's calculations, the factory alone was worth more than $22 million, excluding the value of the remaining contracts for planes or spare parts.

When Electric Boat purchased Canadair, its production line and inventory systems were in disorder. Hopkins hired Canadian-born mass-production specialist H. Oliver West to take over the president's role and return Canadair to profitability. Shortly after the takeover, Canadair began delivering its new Canadair North Star (a version of the Douglas DC-4), and was able to deliver aircraft to Trans-Canada Airlines, Canadian Pacific Airlines, and British Overseas Airways Corporation (BOAC) well in advance of their contracted delivery times.

As defense spending increased with the onset of the Cold War, Canadair went on to win many Canadian military contracts for the Royal Canadian Air Force, and became a major aerospace company. These included Canadair T-33 trainer, the Canadair Argus long-range maritime reconnaissance and transport aircraft, and the Canadair F-86 Sabre. Between 1950 and 1958, 1,815 Sabres were built. Canadair also produced 200 CF-104 Starfighter supersonic fighter aircraft, a license-built version of the Lockheed F-104.

In 1976, Canadair was sold back to the Canadian Government, which sold it to Bombardier Inc. in 1986.

General Dynamics emerges

As the aircraft production at Canadair became increasingly important to the company, Hopkins argued that the name "Electric Boat" was no longer appropriate. On 24 April 1952, Electric Boat was reorganized as General Dynamics.

General Dynamics was still flush with cash after the Canadair purchase, and, given the success of that company, it continued to look for new aviation purchases. In March 1953, it purchased Convair from the Atlas Group. The sale was approved by government oversight with the proviso that General Dynamics would continue to operate out of Air Force Plant 4 in Fort Worth, Texas. This factory was set up in order to spread out strategic aircraft production and rented to Convair during the war to produce B-24 Liberator bombers. Over time, the Fort Worth plant became Convair's major production center.

As was the case with Canadair, Convair worked as an independent division under the General Dynamics umbrella. Over the next decade, the company introduced the F-106 Delta Dart Interceptor, the B-58 Hustler, and the Convair 880 and 990 airliners. Convair also introduced the Atlas missile platform, the first U.S. operational intercontinental ballistic missile.

Management churn

Hopkins fell seriously ill during 1957, and was eventually replaced by Frank Pace later that year. Meanwhile, John Naish succeeded Joseph McNarney as president of Convair. Henry Crown became the company's largest shareholder, and merged his Material Service Corporation with GD in 1959.

Naish left in May 1961, taking most of Convair's top people with him. GD subsequently reorganized into Eastern Group in New York City and Western Group in San Diego, California, with the latter taking over all of the aerospace activities and dropping the Convair brand name from its aircraft in the process.

Frank Pace retired under pressure in 1962 and Roger Lewis, former Assistant Secretary of the Air Force and Pan American Airways CEO, was brought in as CEO. The company recovered, then fell back into the same struggles. In 1971, the board brought in McDonnell Douglas president Dave Lewis (no relation) as chairman and CEO, who served until retiring in 1985.

Aviation powerhouse

During the early 1960s the company bid on the United States Air Force's TFX (Tactical Fighter, Experimental) project for a new low-level "penetrator". Robert McNamara, newly installed as the Secretary of Defense, forced a merger of the TFX with U.S. Navy plans for a new long-range "fleet defender" aircraft. In order to bid on a naval version successfully, GD partnered with Grumman, who would build a customized version for aircraft carrier duties. After four rounds of bids and changes, the GD/Grumman team finally won the contract over a Boeing submission.

The F-111 first flew in December 1964. The F-111B flew in May 1965, but the Navy said that it was too heavy for use on aircraft carriers. With an unacceptable Navy version, estimates for 2,400 F-111s, including exports, were sharply reduced, but GD still managed to make a $300-million profit on the project. Grumman went on to use many of the innovations of the F-111 in the highly successful F-14 Tomcat, an aircraft designed solely as a carrier-borne fighter.

Reorganization

In May 1965, GD reorganized into 12 operating divisions based on product lines. The board decided to build all future planes in Fort Worth, ending plane production at Convair's original plant in San Diego but continuing with space and missile development there. In October 1970, Roger Lewis left and David S. Lewis from McDonnell Douglas was named CEO. Lewis required that the company headquarters move to St. Louis, Missouri, which occurred in February 1971.

F-16 success

In 1972, GD bid on the USAF's Lightweight Fighter (LWF) project. GD and Northrop were awarded prototype contracts. GD's F-111 program was winding down, and the company desperately needed a new aircraft contract. It organized its own version of Lockheed's famed "Skunk Works", the Advanced Concepts Laboratory, and responded with a new aircraft design incorporating modern equipment.

GD's YF-16 first flew in January 1974, and proved to have slightly better performance than the YF-17 in head-to-head testing. It entered production as the F-16 in January 1975 with an initial order of 650 and a total order of 1,388. The F-16 also won contracts worldwide, beating the F-17 in foreign competition as well. GD built an aircraft production factory in Fort Worth, Texas. F-16 orders eventually totaled more than 4,000, making it the largest and most successful program for the company, and one of the most successful western military projects since World War II.

Land Systems focus

In 1976, General Dynamics sold the struggling Canadair back to the Canadian government for $38 million. By 1984, General Dynamics had four divisions: Convair in San Diego, General Dynamics-Fort Worth, General Dynamics-Pomona, and General Dynamics-Electronics. In 1985 a further reorganization created the Space Systems Division from the Convair Space division. In 1985, GD also acquired Cessna. In 1986 the Pomona division (which mainly produced the Standard Missile and the Phalanx CIWS for the Navy) was split up, creating the Valley Systems Division. Valley Systems produced the Stinger surface-to-air missile and the Rolling Airframe Missile (RAM). Both units were recombined into one entity in 1992.

Henry Crown, still GD's largest shareholder, died on 15 August 1990. Following this, the company started to rapidly divest its under-performing divisions under CEO William Anders. Cessna was re-sold to Textron in January 1992, the San Diego and Pomona missile production units to General Motors-Hughes Aerospace in May 1992, the Fort Worth aircraft production to Lockheed in March 1993 (a nearby electronics production facility was separately sold to Israeli-based Elbit Systems, marking that company's entry into the United States market), and its Space Systems Division to Martin Marietta in 1994. The remaining Convair Aircraft Structure unit was sold to McDonnell Douglas in 1994. The remains of the Convair Division were simply closed in 1996. GD's exit from the aviation world was short-lived, and in 1999 the company acquired Gulfstream Aerospace. The Pomona operation was closed shortly after its sale to Hughes Aircraft.

Having divested itself of its aviation holdings, GD concentrated on land and sea products. GD purchased Chrysler's defense divisions in 1982, renaming them General Dynamics Land Systems. In 2003, it purchased the defense divisions of General Motors as well. It is now a major supplier of armored vehicles of all types, including the M1 Abrams, LAV 25, Stryker, and a wide variety of vehicles based on these chassis. Force Protection, Inc. was acquired by General Dynamics Land Systems in November 2011 for $350 mil.

General Dynamics Land Systems was hurt by the cancellation of the US Army's Future Combat Systems program and the loss in the MRAP-All Terrain Vehicle competition.

Government lawsuit and settlement

On August 19, 2008, GD agreed to pay $4 million to settle a lawsuit brought by the US Government claiming that a GD unit fraudulently billed the government for defectively manufactured parts used in US military aircraft and submarines. The US alleged that GD defectively manufactured or failed to test parts used in US military aircraft from September 2001 to August 2003, such as the C-141 Starlifter transport plane. The GD unit involved, based in Glen Cove, New York, closed in 2004.

Timeline

Electric Boat was established in 1899.

Divestitures

• 1967 - General Atomics to Gulf Oil
• 1976 - Canadair sold back to the Canadian government.
• 1981 - Following expropriation legislation passed by the government of the Province of Quebec, General Dynamics' Canadian subsidiary sold its 54.6% controlling interest in Asbestos Corporation Limited to the Quebec government-owned corporation, Société nationale de l'amiante (SNA).
• 1991 - Data Systems Division sold to Computer Sciences Corp.
• 1992 - Tactical Missiles Division to Hughes Aircraft Company.
• 1992 - Cessna to Textron.
• 1992 - Electronics Division sold to Carlyle Group of Washington, D.C. and renamed GDE Systems
• 1993 - Fort Worth Division, a producer of fixed-wing military aircraft, to Lockheed (a nearby electronics production facility, in which Lockheed was not interested, was sold separately to Elbit Systems).
• 1993 - Space Systems Division to Martin Marietta.
• 1994 - Convair's aerostructures unit to McDonnell Douglas, (Convair closed in 1996).
• 2006 - Material Service to Hanson.
• 2007 - Freeman United Coal Mining Co. sold to Springfield Coal Co. for an undisclosed amount
• 2010 - GD Advanced Information Systems Spacecraft division to Orbital Sciences

Company outline

Aircraft systems

• General Dynamics F-111 Aardvark
  • General Dynamics-Grumman F-111B
  • General Dynamics F-111C
  • General Dynamics F-111K
  • General Dynamicsâ€"Grumman EF-111A Raven
• General Dynamics F-16 Fighting Falcon
  • General Dynamics F-16 VISTA
  • General Dynamics F-16XL
  • General Dynamics F-16 Fighting Falcon variants
• Martin/General Dynamics RB-57F Canberra

Marine systems

• American Overseas Marine Corporation
• Bath Iron Works
• Electric Boat
• National Steel and Shipbuilding Company
• Quincy Shipbuilding Division (closed 1986)

Missile systems

• RIM-24 Tartar
• FIM-43 Redeye
• MIM-46 Mauler
• RIM-66 Standard
• AGM-78 Standard ARM
• FIM-92 Stinger
• AIM-97 Seekbat
• RIM-116 Rolling Airframe Missile
• AGM-129 ACM
• Tomahawk (missile)
  • BGM-109G Ground Launched Cruise Missile

Combat systems

Former General Dynamics Pomona Division Phalanx CIWS

• General Dynamics Land Systems
  • General Dynamics Robotic Systems
    • Autonomous Navigation System
    • Mobile Detection and Assessment Response System
    • Unmanned Surface Vehicle
  • Expeditionary tank
  • M1 Series Abrams Main Battle Tank
  • Expeditionary Fighting Vehicle
  • Heavy Assault Bridge Program
  • Stryker Armored Combat Vehicle
  • Crusader Self-Propelled Howitzer
• General Dynamics Armament and Technical Products
  • GAU-17 (Minigun)
  • GAU-19
• General Dynamics Ordnance and Tactical Systems
• General Dynamics European Land Systems (GDELS)
  • GDELS-Steyr
    • ASCOD AFV (Ulan)
    • Pandur II
  • GDELS-Mowag
    • Mowag Duro
    • Mowag Eagle
    • Mowag Piranha
  • GDELS-Santa Bárbara Sistemas
    • Leopard 2E
    • ASCOD AFV (Pizarro)
• General Dynamics United Kingdom Limited
  • Scout SV

Information Systems and Technology

Information Systems and Technology represent 34% of the company's revenue.

• General Dynamics Mission Systems
  • General Dynamics SATCOM Technologies, a subsidiary of GDMS.
  • General Dynamics Mission Systems - Canada, a subsidiary of GDMS
  • General Dynamics Global Imaging Technologies, a subsidiary of GDMS
  • General Dynamics United Kingdom
• General Dynamics Information Technology
  • General Dynamics Wireless Services

Launch vehicles

• Atlas (rocket family)
  • Atlas-Centaur
  • Atlas E/F
  • Atlas G
  • Atlas H
  • Atlas SLV-3
  • Atlas-Agena
• NEXUS (rocket) space launch vehicle

Aerospace

• Gulfstream Aerospace
• Jet Aviation

Corporate governance

Current members of the board of directors of General Dynamics are: Mary Barra, Nicholas Chabraja, James Crown, William Fricks, Paul Kaminski, John Keane, Lester Lyles, James N. Mattis, Phebe Novakovic, William A. Osborn, Laura J. Schumacher and Robert Walmsley.

Financials

General Dynamics has about $30 billion in sales, primarily military, but also civilian with its Gulfstream Aerospace unit and conventional shipbuilding and repair with its National Steel and Shipbuilding subsidiary.

In 2004 General Dynamics bid for the UK company Alvis plc, the leading British manufacturer of armored vehicles. In March the board of Alvis Vickers voted in favor of the £309m takeover. However at the last minute BAE Systems offered £355m for the company. This deal was finalized in June 2004.

Controlled subsidiaries of the corporation are donors to the Canadian Defence and Foreign Affairs Institute.