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GENERAL DYNAMICS EXECUTIVES ADDRESS MEETING OF SECURITY ANALYSTS

 GENERAL DYNAMICS EXECUTIVES ADDRESS MEETING OF SECURITY ANALYSTS
 NEW YORK, Sept. 15 /PRNewswire/ -- At a meeting of Wall Street analysts today, Chairman and Chief Executive Officer William A. Anders and top General Dynamics' executives discussed the company's strategy, the performance of the core businesses, and the principles and priorities management will follow to strengthen its core businesses in response to the changing defense marketplace.
 James R. Mellor, president and chief operating officer, pointed out the increased potential of General Dynamics core businesses -- armored vehicles, nuclear submarines, space launch systems and tactical military aircraft. This increased potential has resulted from a more business- like corporate culture, the new, value-oriented operating team in place, the implementation of management and financial controls, higher margins, reduced assets, successful focus on strong cash generation, reduction of risk in the backlog, and the acquisition of profitable new business.
 Mr. Anders reviewed the rationale underlying the company's strategy to focus on core defense businesses and to monetize its non-core operations. Recognizing that General Dynamics' operations and restructuring actions will continue to generate substantial amounts of cash, he reiterated the company's priorities for the use of cash: to reduce debt, provide liquidity, invest judiciously, and return excess to shareholders. Mr. Anders pointed out that in 1992 the company had already reduced debt by $350 million, repurchased $957 million worth of stock, and increased the dividend by 60 percent in keeping with these priorities.
 Looking forward, Mr. Anders repeated his view that defense industry rationalization (consolidation through sale, purchase or merger of programs) is necessary to eliminate overcapacity, thereby bringing the industry's supply (capacity) in balance with declining demand (defense procurement). He said that only those businesses that obtain "critical mass" -- an efficient balance of supply (its plant, skills and technology) with demand (ongoing production of weapons systems) -- will emerge strong and viable for the long-term from this rationalization process.
 Mr. Anders said that General Dynamics has put in place a number of straightforward rules to guide its rationalization efforts as it seeks to strengthen further its core businesses. Every action must enhance shareholder value and increase program efficiency and critical mass for the franchise. He stressed that because defense customers are increasingly focused on high quality, low cost, low rate production, it is essential to achieve maximum program efficiency to maintain the levels of profitability necessary to sustain viable businesses into the next decade.
 Discussing GD's rationalization priorities, Mr. Anders said that program efficiency is, therefore, the number one priority. He also pointed out that the utilization of the company's up-to-date facilities and skilled workforce, especially where they represent critical elements of the defense industrial base, is important. However, the long-term preservation of facilities and workforce depends upon the company's success in achieving program efficiency. Mr. Anders said that the preservation of the General Dynamics' "name plate" on a business is of value, but it cannot stand in the way of obtaining program efficiency or maintaining plant and skills critical to the defense industrial base. Defense companies that have these priorities in the reverse order risk the destruction of their franchises to the detriment of their customers, employees and shareholders, he said.
 Reflecting the focus on strengthening its core defense businesses, the company recently named as presidents the heads of each business, empowering them to strengthen program efficiency and obtain critical mass. Each core president reviewed his business' core backlog, high potential additions to that backlog in the foreseeable future, and strong potential for continued growth in profitability, and high cash generation for the coming year.
 Mr. Anders concluded by restating General Dynamics' objective to create low cost, strong and stable franchises with sufficient critical mass to prosper over the long-term. He pointed out that achieving this objective will provide high quality, affordable weapons systems for our national defense, strong, predictable value for shareholders, and secure, meaningful work for employees.
 -0- 9/15/92
 /CONTACT: Ray Lewis of General Dynamics, 703-876-3195/
 (GD) CO: General Dynamics Corporation ST: Virginia IN: ARO SU:


KD -- NY071 -- 9767 09/15/92 15:53 EDT
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Date:Sep 15, 1992
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