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GENERAL DYNAMICS SHARPENS FOCUS ON CORE BUSINESSES

 GENERAL DYNAMICS SHARPENS FOCUS ON CORE BUSINESSES
 Tactical Aircraft, Submarines, Armored Vehicles and Space
 Form Company's Future
 'Plan of Contraction' Adopted to Meet New Realities
 of Marketplace and Enhance Value to Customer,
 Employees and Shareholders
 LIMA, Ohio, May 6 /PRNewswire/ -- William A. Anders, Chairman and Chief Executive Officer, announced today at General Dynamics' (NYSE: GD) annual shareholders' meeting that the company will adapt to the new realities of the defense marketplace by concentrating its future business operations on four core areas -- Tactical Aircraft, Nuclear Submarines, Armored Vehicles and Space Launch Systems.
 Noting that each of these core businesses "represents a 'major platform' business" and that "each has a strong franchise in its marketplace," Anders said, "I believe our four core businesses cumulatively represent one of the strongest, most tightly focused companies in our defense marketplace. As we move forward, each of these businesses will be aggressively managed for continued high quality, technical excellence, manufacturing efficiency, and market leadership."
 In response to the challenge of a contracting marketplace, Anders said, "We have adopted a 'plan of contraction' that reflects our intention to place our non-core businesses in other hands as their markets permit and appropriate transactions can be negotiated. Therefore, under generally accepted accounting principles, our non- core businesses will be accounted for as discontinued operations in our future financial statements."
 He said the company's Missiles business had been seriously considered as a potential core business. "Our Missiles operations have strong technical and manufacturing competencies as well as solid reputations for design leadership," Anders said, but noted that by itself, the Missiles business "could not achieve sufficient market position to be the leader in a field which includes nearly a dozen firms in the United States alone." He said that in discussions with numerous other companies "we found more interest in the purchase of our operations than in the sale of their own. We are now entering the final phase of negotiations for the sale of our Missiles business and could well announce a transaction in the near future."
 Anders said that contracting the company through disposition of non-core businesses "will not only permit us to focus on strengthening our four core businesses, but also will support our objectives of increasing financial strength and enhancing shareholder value."
 Anders said the company's new management team brought about a "dramatic turnaround" in 1991, and that "these positive trends" have continued into 1992. He said that in 1991 the company successfully implemented a plan which benefited "our customers, employees and shareholders by reversing this company's downward slide." Profit margins and productivity improved, net income and shareholder value rose, and a cash and marketable securities balance of over $800 million was achieved by year-end, rising to $1.2 billion by March 31, 1992.
 Anders said the company's priorities for use of its cash resources are to support liquidity needs, bring down debt to appropriate levels "to weather the turbulence we face in our defense marketplace" and "to satisfy the investment needs of our core businesses." At the same time, he said, it is clear that the company is generating cash resources "well in excess of that needed to satisfy those priorities."
 "We continue to believe the most effective and efficient way to apply our excess cash to the commercial economy is through its distribution to our shareholders," Anders said. "We believe they should have the opportunity to make their own individual decisions regarding commercial diversification. We continue to weigh carefully the various alternatives available to us for returning excess value to shareholders ... and we are committed to acting as quickly as is practical."
 At the meeting, shareholders elected the company's slate of 15 directors, approved the retention of Arthur Andersen & Co. as independent auditors, and defeated a shareholder proposal by a more than five-to-one margin.
 -0- 5/6/92
 /CONTACT: Alvin A. Spivak of General Dynamics, 703-876-3190/
 (GD) CO: General Dynamics ST: Ohio IN: ARO SU:


MH -- DC018 -- 7033 05/06/92 11:21 EDT
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Publication:PR Newswire
Date:May 6, 1992
Words:660
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