General Dynamics Scales Back Tank Production
General Dynamics, an American aerospace and defense company, is one of the largest defense contractors in the world. In 2012, they were ranked as the world’s 5th largest defense contractor, and have now earned the 4th spot in recent years. General Dynamic’s
total arms sales are valued at $24 billion, with $2.6 billion in total profit. Their core military programs include the Abrams M1 Main Battle Tank, which is the standard tank of the US military. In addition, they support ships, munitions, and military-grade communication systems.
General Dynamics is also responsible for designing US Navy nuclear-powered attack submarines for which it has been awarded many multi-million dollar contracts.One obstacle in the road for the military business of General Dynamics is the decision by the Pentagon to cut back on spending on its fleet of battle tanks
. There are more than enough tanks to meet the country’s defense needs so there is no requirement to repair, refurbish, or otherwise order additional tanks at this time. This decision that is estimated to cut $500 billion from the defense budget over the next decade and save $3 billion in taxpayer dollars over the next 3 years. This is a considerable blow to General Dynamics as well as other companies, as the United States has not stopped producing tanks since World War II. With this new development, expect the company to shift its focus to other areas for revenue, including ship and air technologies. General Dynamics operates with four main business segments: Marine Systems, Combat Systems
, Information Systems and Technology, and Aerospace. The company, founded in 1899, is now a conglomerate that conducts business over several industries with reported annual revenue of $31.513 billion. It is publicly traded in the NYSE and listed on the S&P 500 Component.
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Posted on September 3, 2014