General Dynamics Corporation is a defense conglomerate formed by mergers and divestitures, and as of 2008 it is the fifth largest defense contractor in the world. The company has changed markedly in the post-Cold War era of defense consolidation. The company has four main business segments: Marine Systems, Combat Systems, Information Systems and Technology, and Aerospace. The company's former Fort Worth Division manufactured the F-16 Fighting Falcon, the most-produced Western jet fighter, but that subsidiary was sold to Lockheed in 1993. GD reentered the airframe business in 1999 with their purchase of Gulfstream Aerospace.
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 Holland Torpedo Boat Company was now legitimized as genuine naval weapons by the world's most powerful navies.
In the post-World War II wind-down, the Electric Boat Company was cash-flush but lacking in work, with its workforce shrinking from 13,000 to 4,000 by 1946. Hoping to diversify, the president and chief executive officer, John Jay Hopkins, started looking for companies that would fit into Electric Boat's market.
They 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 they 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. The effects were astonishing; shortly after the takeover, Canadair began delivering its new Canadair North Star (a version of the 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 would go 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, which some argue is the best version of that aircraft to be built. Between 1950 and 1958, 1,815 Sabres were built.
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 the name was officially changed to General Dynamics.
GD was still cash-flush after the Canadair purchase, and given the success of that company they continued to look for new aviation purchases. In March 1953 they purchased Convair from the Atlas Group. The sale was OKed by government oversight with the proviso that GD would continue to operate out of Air Force Plant 4 in Fort Worth, TX. 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 would become Convair's major production center.
As was the case with Canadair, Convair worked as an independent division within the GD umbrella. Over the next decade the company introduced the F-106 Delta Dart interceptor (the earlier F-102 Delta Dagger being designed before the takeover), the B-58 Hustler and the Convair 880 and 990 airliners. Convair also introduced the first operational intercontinental ballistic missile, the Atlas.
Hopkins fell seriously ill during 1957, and was eventually replaced by Frank Pace late 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 and Western Group in San Diego, 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 Secretary of the Army and Pan American Airway's CEO was brought in as the new CEO. The company recovered then fell back into the same struggles. In 1971, the board brought in Dave Lewis (no relation) as Chairman and CEO. At the time he was President of McDonnell Douglas. Dave Lewis served until his retirement in 1985.
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 build the F-14 Tomcat, an aircraft that used many of the innovations of the F-111, but designed solely as a carrier-borne fighter.
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 San Diego (Convair's original plant), 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, which occurred in February 1971.
In 1972, GD bid on the USAF's Lightweight Fighter (LWF) project. GD and Northrop were awarded prototype contracts. GD, whose F-111 program was winding down, desperately needed a new aircraft contract. They organized their own "Skunk Works" group, the Advanced Concepts Laboratory, and responded with a new aircraft design that was significantly more modern than the Northrop version.
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. F-16 orders eventually totaled more than 4,000, making it the largest and most successful program for GD, and one of the most successful western military projects, since World War II.
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.
Henry Crown, still GD's largest shareholder, died on 15 August 1990. Following this, the company started to rapidly divest its underperforming divisions. Cessna was re-sold to Textron in January 1992, the San Diego missile production to General Motors-Hughes Aerospace in May 1992, the Fort Worth aircraft production to Lockheed in March 1993, 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 they acquired Gulfstream Aerospace.
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 they 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.
In 2004 General Dynamics bid for the UK company Alvis Vickers, the leading British manufacturer of armoured vehicles. In March the board of Alvis Vickers voted in favour of the £309m takeover. However at the last minute BAE Systems offered £355m for the company in what was seen as a move to keep General Dynamics out of its "back yard". This deal was finalised in June 2004.
General Dynamics has tried to acquire Newport News Shipbuilding but been blocked by regulators and competitors, as this would make General Dynamics the sole manufacturer of nuclear-powered ships in the United States.
Controlled subsidiaries of the corporation are donors to the Canadian Defence and Foreign Affairs Institute.