GD Discussing Sale of San Diego Missile Business : Defense: The city’s largest single employer wants to sell or realign operations that fall outside its core businesses.
General Dynamics is holding at least preliminary discussions about a possible sale or a joint venture of its San Diego-based missile business with several major competitors, including Hughes Aircraft, Raytheon and Loral, according to industry sources.
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 said 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.
The Virginia-based firm previously has said it wants to sell or otherwise realign businesses that fall outside of its core businesses--submarines, tanks and fighter aircraft.
General Dynamics is San Diego County’s largest single private employer, with more than 14,000 employees.
Non-core businesses in San Diego include the missiles and electronics group, the Convair Division and the Space Systems Division. General Dynamics is also studying the fate of its air defense systems division in Pomona.
General Dynamics Chairman William Anders sparked rampant speculation about the future of the company’s San Diego-based operations late last year during a speech to defense industry officials. Anders said the company would concentrate its efforts on markets in which it is a leader--meaning its aircraft, submarine and tank businesses.
A key industry source said 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 missile technology, because both firms are considered leaders in infrared and radar-seeking technology. The proximity of the firms’ Southern California operations to each other would also be a benefit, the source said.
“Our management is actively exploring options to provide (non-core businesses) staying power similar to that of our major platform businesses, possibly through sales, acquisitions, mergers or other arrangements,” Anders said in a statement Wednesday.
He also indicated that General Dynamics hasn’t decided to simply shut down businesses outside its core areas and “liquidate.”
“We have been doing exactly what we have said we would do: increasing our focus on strengthening our core defense businesses, maintaining technical excellence, improving productivity and rebuilding our financial position, all with a view toward making our businesses stronger in the face of an increasingly challenging industry environment,” Anders said.
Times staff writer Greg Johnson in San Diego contributed to this report.
