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GENERAL DYNAMICS TO RESTRUCTURE HEADQUARTERS AND MANAGEMENT

 FALLS CHURCH, Va., March 18 /PRNewswire/ -- William A. Anders, chairman and chief executive officer of General Dynamics Corporation (NYSE: GD), today announced a comprehensive plan to restructure the company's corporate headquarters and management organization. Anders said: "When our new management team took over in January 1991, its task was to turn around an underperforming company. We have made exceptional progress in rebuilding operating and financial performance and in strategically reshaping the company to meet the demands of a rapidly contracting defense market. Over the last two years, General Dynamics has been the No. 1 performing company in the S&P 500 and has been a leader in the consolidation of America's defense industry. We enter 1993 with a strong and highly focused base of Armored Vehicles, Nuclear Submarines and Space Launch Systems operations representing $3.5 billion in annual sales and a total backlog of over $9 billion. In order for our customers, employees and investors to be well served in future years, we now must ensure that our management structure and corporate headquarters are equally lean and highly focused, and that our approach to corporate governance continues to be in keeping with the best practices of the 1990s.
 "Therefore," Anders said, "with the concurrence of the board of directors, I am implementing the following changes in the size and structure of General Dynamics headquarters and management team:
 "First, General Dynamics' corporate headquarters staff will be reduced in stages from its current size of 250 to approximately 50 individuals by the end of 1994. This reflects both our program to empower operating divisions by transferring some administrative functions to them, as well as the reduced staff needs of a smaller, more highly focused company.
 "Second, effective immediately, we are delayering the company by eliminating the Group Executive organizations currently separating the presidents of our operating divisions and the president of the corporation. Accordingly, Executive Vice President James E. Turner, current head of the company's Marine, Land Systems and Services Group, will assume the presidency of the Electric Boat Division. Electric Boat's current president, Roger E. Tetrault, will become president of the Land Systems Division, succeeding George P. Psihas, who has reached retirement age. Similarly, Executive Vice President Lester Crown will retire as an employee of General Dynamics while continuing as a member of the board of directors.
 "Third, the position of chief executive officer will be combined with that of the chief operating officer, eliminating an additional layer of management. In addition, the chief executive officer will be the only employee member of the board of directors. In keeping with corporate governance standards increasingly preferred by shareholders, an individual other than the chief executive officer will serve as chairman of the board of directors.
 "Accordingly, at the May 1993 annual meeting, I will assume the role of non-employee chairman of the board of directors, with continued responsibilities for corporate strategy and oversight, as well as ensuring that General Dynamics' strong performance momentum continues into future years. I will be joined in that effort by Vice Chairman Harvey Kapnick, who also will retire as an employee of the company and assume the role of chairman of the Finance Committee of the Board at that time. My current duties as chief executive officer will be transferred to President James R. Mellor, whose exceptional performance as chief operating officer has shown him to be the ideal individual to ensure steadily improving corporate performance in future years.
 "Fourth, although the board of directors will remain unchanged over the coming year to ensure continuity during this transition period, the size and maximum age of the board will be reduced at the 1994 annual meeting, again reflecting the smaller, more highly focused nature of the corporation. In addition, General Dynamics is redeeming its preferred stock purchase rights, sometimes referred to as a `Poison Pill,' as this vestige of the 1980s serves no discernible purpose in today's business environment. Shareholders of record April 5, 1993, will receive $0.01 for each of the rights associated with their shares, payable April 22, 1993.
 "The changes announced today will significantly and appropriately reduce future overhead costs at General Dynamics, streamline its management structure, and further empower its operating units while ensuring continuity of strategy and enhancing corporate governance," Anders said.
 -0- 3/18/93
 /CONTACT: Alvin A. Spivak of General Dynamics, 703-876-3190/
 (GD)


CO: General Dynamics Corporation ST: Virginia IN: ARO SU: PER RCN

MH -- DC002 -- 7305 03/18/93 08:46 EST
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Publication:PR Newswire
Date:Mar 18, 1993
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