General Dynamics Discusses Missile Group Deal

General Dynamics is holding at least preliminary discussions about a possible sale or a joint venture of its missile business with several major competitors, including Hughes Aircraft, Raytheon and Loral, according to industry sources.

The Virginia-based firm previously has said it wants to sell or otherwise realign its missiles and electronics group, including its air defense systems division in Pomona and its Convair and electronics divisions in San Diego.

Spokesmen for Hughes, Raytheon and Loral declined to comment.

A General Dynamics spokesman said the firm is holding discussions “with lots of companies, but I couldn’t specify which ones.” He asserted that General Dynamics has not narrowed its discussions to a single possible partner or acquiring company.

“Everything is on the table and has been for some time,” he said.

A key industry source said that both Hughes and Raytheon would be logical candidates to either buy the operations or otherwise link up with General Dynamics. General Dynamics builds the Navy Standard missile, the Army Stinger missile and two cruise missiles.

Since Lexington, Mass.-based Raytheon is a “second source” to the government for production of many of General Dynamics’ missiles, a combination of the two companies would help eliminate the inefficiency of having two producers vying for a shrinking base of business, the source noted.

General Dynamics and Hughes may have more in common in terms of missile technology, because both firms are considered leaders in infrared and radar-seeker technology. The proximity of the firms’ Southern California operations would also be a benefit, the source said.

In a speech that gained wide attention last year, General Dynamics Chairman William Anders said he wanted the firm to concentrate its efforts on markets in which it is a leader--meaning its aircraft, submarine and tank business.

Times staff writer Greg Johnson in San Diego contributed to this report.