Gen. Dynamics Chief Quits After Navy Assails Policies : High TRW Official to Take Job
General Dynamics Corp., under fire by the Pentagon for alleged unethical dealings on defense contracts, today announced the retirement of David Lewis, its chairman and chief executive officer.
The firm said Lewis, 67, will be replaced by Stanley Pace, 64, now vice chairman of TRW, another major defense contractor.
Lewis said in a statement that he had been planning to retire for some time but had stayed on while the firm was facing what he called “extremely heavy outside pressures.”
The announcement came one day after Navy Secretary John F. Lehman Jr. canceled two contracts and froze all new contracts at two General Dynamics divisions for breaches of ethics, influence peddling and padding bills to the Pentagon.
Fined Over Gifts
The company also was fined $676,000 for giving “trinkets” to retired Adm. Hyman G. Rickover.
The freeze on contracts would involve between $600 million and $1 billion on arms orders for the firm, the country’s third biggest weapons maker.
Pentagon Inspector General Joseph Sherick had urged that Lewis and two other senior General Dynamics officials be barred from doing further business with the Pentagon, but Lehman rejected the recommendation.
Lewis said in a statement that Pace will join General Dynamics as vice chairman on June 1 and will step up when Lewis retires, “no later than Jan. 1.”
One of Pace’s first jobs, Lewis said, will be to restore the company’s image.
To Review Accounting
“In the near term, he will spend a great deal of time reviewing and improving our overhead accounting and ‘contract charging’ practices, which have been the subject of so much adverse publicity over the past several weeks,” Lewis said.
In a rare interview, Lewis last month told the St. Louis Post-Dispatch that 15 years with the company was enough.
“Retirement from this job is overdue . . . I think it’s time,” he told the newspaper. But he said he did not want to quit under pressure.
Lewis has always defended the company, acknowledging that some mistakes had been made but saying they were minor and not intended to defraud taxpayers.
“We probably do (deserve) the blame,” he said, “and we’ve got to take it. Although these things we are accurately blamed for--I don’t want to call them minuscule--they are dumb and shouldn’t have been done. But they are not major in terms of the job we are under contract (with) the government to do.
‘We Made Mistakes’
“We made some mistakes, and, fortunately, they haven’t been in the big dollars, but they are in the areas of high visibility, which the taxpayers have a right to be unhappy about.”
Lewis was president of rival McDonnell Douglas Corp. in 1970 when he was wooed away by General Dynamics. He is credited with taking what was a struggling company and turning it into one of the top three contractors in the defense industry.
The executive said he was sure the 99,000 employees of General Dynamics around the world believe he has done nothing wrong.
“I don’t think our people think I am guilty of anything,” Lewis told the Post-Dispatch. “And I don’t either. It has got to bother them if they thought I was quitting (under) fire. That would be incredible. That is not Lewis.”
Rickover censured, Page 6.
