General Dynamics News - Thursday, November 30, 2006

STERLING HEIGHTS, Mich. – The U.S. Army has awarded General Dynamics Land Systems, a business unit of General Dynamics (NYSE: GD), two contracts totaling $359 million for Abrams main battle tank work. The first contract, for $339 million for production of 350 M1A1 Abrams Integrated Management (AIM) tanks, includes an option for 50 additional tanks that would increase the value to $401 million if exercised. The second contract is for $20 million for production of loader’s thermal weapon sights for M1A1 and M1A2 Abrams tanks.

These contracts follow a $380 million Army contract announced by General Dynamics on Tuesday to upgrade 180 Abrams tanks with the M1A2 System Enhancement Package (SEP). The total potential value of all three tank-related contract awards is more than $800 million.

The AIM process is a joint effort to refurbish M1A1 Abrams main battle tanks and involves the U.S. Army Project Manager for Heavy Brigade Combat Team, TACOM Life Cycle Management Command, Anniston (Ala.) Army Depot and General Dynamics Land Systems. Under the AIM process, M1A1 Abrams tanks are completely disassembled and overhauled to a like-new, zero-mile condition. Refurbished tanks incur lower operational and support costs and report higher operational readiness rates.

The M1A1 AIM tanks will be configured with additional mission-critical technologies to bolster crew situational awareness (SA). The SA package improvements include second-generation Forward-Looking Infrared, Far Target Locate, Blue Force Tracking (BFT)/Force Battle Command Brigade and Below (FBCB2), a tank-infantry phone, a .50 caliber thermal sight, a power distribution box, a rear slave receptacle, an eye-safe laser rangefinder and driver's vision enhancement. This situational awareness package increases the M1A1 Abrams tank's fighting capability by providing soldiers with an electronic graphic of the battlefield with icons for friendly and enemy forces, and provides a tank commander’s thermal sight for the .50 caliber machine gun.

The AIM work will be performed by existing General Dynamics employees in Lima, Ohio; Sterling Heights, Mich.; and Scranton, Pa. The tanks are scheduled for delivery to the Army beginning in July 2008 and continuing through October 2010.

Deliveries for the second contract, for loader’s thermal weapon sights for M1A1 and M1A2 Abrams tanks, are scheduled to be completed by May 2008. Work will be performed by existing General Dynamics employees in Sterling Heights, Mich.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 81,100 people worldwide and expects 2006 revenue of approximately $24 billion. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation. More information about the company is available online at www.generaldynamics.com.

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