Stryker at Yakima, Wash., training center General Dynamics photo

Nicholas D. Chabraja, General Dynamics CEO, said the deal has been approved by the boards of both companies. Subject to regulatory approval, it is expected to close by the end of the first quarter of 2003, he said.

In a joint venture with General Dynamics, GM Defense produces Stryker, the U.S. Army’s transformational combat vehicle. Other GM Defense products include the Light Armored Vehicle (LAV) for Canada, Australia, New Zealand and Saudi Arabia; and the Piranha combat vehicle for several international customers. GM said it anticipates 2002 revenues of approximately $950 million, and has a backlog of more than $1.5 billion.

GM Defense has 2,400 employees in four operating units: GM Defense, Delco Systems in Goleta, Calif.; GM Defence, Australia in Adelaide, South Australia; GM Defense, Canada in London, Ontario; and MOWAG Motorwagenfabrik AG in Kreuzlingen, Switzerland. Chabraja said he anticipates no changes to production workforces in any of the GM Defense locations, and will honor all existing labor agreements.

"This transaction secures the best possible long-term future for the GM Defense business and its employees, while contributing significantly to GM’s cash and liquidity objectives," said GM Chairman Jack Smith.

"GM Defense has been our valued partner on Stryker," said Chabraja. "This is a company with a strong management team and an experienced workforce. It has important vehicle technology, high quality products, and an established worldwide customer base. The acquisition will enable us to be increasingly responsive to our U.S., Canadian and worldwide customers and creates synergy in the development of new technology. It enhances General Dynamics’ product offerings and expands our global markets. Furthermore, it gives our Combat Systems group critical mass: the right amount and balance of work and resources needed to produce and support high quality, affordable weapons systems."

Headquartered in Falls Church, Va., General Dynamics employs approximately 54,000 people worldwide and anticipates 2002 revenue of $14 billion. The company manufacturers mission-critical information systems and technologies, land and amphibious combat systems, shipbuilding and marine systems, and business aviation.