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General Dynamics to move headquarters to Washington

ST. LOUIS -- General Dynamics Corp., citing defense industry changes, announced Wednesday it would relocate its corporate headquarters to the Washington, D.C., area from St. Louis.

The company, which has about 300 employees in the St. Louis suburb of Clayton, Mo., also said it would establish a St. Louis corporate service center to perform some functions that would not be moved to Washington.

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The move is expected to occur in the late summer or early fall, General Dynamics said.

'With the end of the Cold War and increasing pressure on the federal budget, the defense industry of the future will be characterized by reduced government spending and increased competition,' said General Dynamics Chairman William A. Anders.

'Washington, D.C., will be the center of much debate and review of national security policy, military force structure, equipment programs, and defense acquisition and export policies.'

Anders said the company could operate more effectively and efficiently if its headquarters were near its principal customers.

The move to Washington is a practical decision for General Dynamics, said Craig Kraff, a defense industry analyst with Edward D. Jones in St. Louis.

'Winning contracts is not just a function of providing the necessary aircraft or submarine,' Kraff said. 'There also, sorry to say, are politics that get involved in a lot of these decisions. It's something that's difficult to quantify, but you know it does have a place in these decisions. Having a presence in D.C. could certainly help that effort.'

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A site for the new headquarters has not been chosen, but the company said it is considering locations in Virginia and Maryland.

General Dynamics, which said it is the nation's No. 2 defense contractor, moved its headquarters to St. Louis from New York in 1971. It is one of 15 Fortune 500 companies located in Missouri.

The company's departure is considered a blow to the city's image and comes shortly after the loss of several thousand jobs at McDonnell Douglas Corp., the nation's top defense contractor based in St. Louis. The city also is concerned about the fate of several thousand employees of troubled Trans World Airlines Inc., which operates its domestic hub at Lambert-St. Louis International Airport.

But Dennis Coleman, executive director of the St. Louis County Economic Council, noted that the city is home to headquarters for Anheuser Busch Inc., Ralston Purina Co., Monsanto Co. and other large corporations.

'Given the fact there are several major corporations, that reduces the impact on St. Louis,' he said. 'Certainly the number of jobs (lost), while high-level and well-paid jobs, are not significant in an area of roughly 1.4 million jobs.'

Based on an analysis of its payroll and local purchases, General Dynamics' 300 jobs created about 850 jobs in the area, according to the Regional Commerce and Growth Association.

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RCGA President Ned Taddeucci said in a statement his organization would continue to promote the advantages of moving corporate headquarters to St. Louis -- a skilled work force, affordable housing and other factors.

General Dynamics, like other defense contractors, has been hurt by an era of fiscal restraint at the Pentagon.

The company, which has a large production plant in Fort Worth, Texas, was forced to lay off several thousand employees after the A-12 attack plane contract it shared with McDonnell Douglas was canceled in January. The Pentagon cited cost overruns and extensive delays in ending the multibillion-dollar program.

In February, the company reported a fourth-quarter loss of $530.1 million, including special charges of $858.9 million. For the fiscal year it lost $577.9 million.

General Dynamics said employees who are not offered positions in Washington or the corporate service center would be encouraged to continue with the company during the transition.

They will be offered a career transition package when they ultimately leave the company. The package will include career counseling, an enhanced severance benefit and an additional financial benefit for employees who have not found jobs at the end of the transition period.

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Anders said the company could operate more effectively and efficiently if its headquarters were near its principal customers.

A site for the new headquarters has not been chosen, but the company said it is considering locations in Virginia and Maryland.

General Dynamics, which said it is the nation's No. 2 defense contractor, moved its headquarters to St. Louis from New York in 1971. It is one of 15 Fortune 500 companies located in Missouri.

The company's departure is considered a blow to the city's image and comes shortly after the loss of several thousand jobs at McDonnell Douglas Corp., the nation's top defense contractor based in St. Louis. The city also is concerned about the fate of several thousand employees of troubled Trans World Airlines Inc., which operates its domestic hub at Lambert-St. Louis International Airport.

General Dynamics, like other defense contractors, has been hurt by an era of fiscal restraint at the Pentagon.

The company, which has a large production plant in Fort Worth, Texas, was forced to lay off several thousand employees after the A-12 attack plane contract it shared with McDonnell Douglas was canceled in January. The Pentagon cited cost overruns and extensive delays in ending the multibillion-dollar program.

Advertisement

In February, the company reported a fourth-quarter 1990 loss of $530. 1 million, including special charges of $858.9 million. For the year, it lost $577.9 million.

General Dynamics said employees who are not offered positions in Washington or the corporate service center would be encouraged to continue with the company during the transition.

They will be offered a career transition package that will benefit them when they ultimately leave the company. The package will include career counseling, an enhanced severance benefit, and an additional financial benefit for employees who have not found jobs at the end of the transition period.

General Dynamics Corp., citing defense industry changes, announced Wednesday it would relocate its corporate headquarters to the Washington, D.C., area from St. Louis.

The company, which has about 300 employees in the St. Louis suburb of Clayton, Mo., also said it would establish a St. Louis corporate service center to perform some functions that would not be moved to Washington.

The move is expected to occur in the late summer or early fall, General Dynamics said.

'With the end of the Cold War and increasing pressure on the federal budget, the defense industry of the future will be characterized by reduced government spending and increased competition,' said General Dynamics Chairman William A. Anders.

Advertisement

'Washington, D.C., will be the center of much debate and review of national security policy, military force structure, equipment programs, and defense acquisition and export policies.'

Anders said the company could operate more effectively and efficiently if its headquarters were near its principal customers.

The move to Washington is a practical decision for General Dynamics, said Craig Kraff, a defense industry analyst with Edward D. Jones in St. Louis.

'Winning contracts is not just a function of providing the necessary aircraft or submarine,' Kraff said. 'There also, sorry to say, are politics that get involved in a lot of these decisions. It's something that's difficult to quantify, but you know it does have a place in these decisions. Having a presence in D.C. could certainly help that effort.'

A site for the new headquarters has not been chosen, but the company said it is considering locations in Virginia and Maryland.

General Dynamics, which said it is the nation's No. 2 defense contractor, moved its headquarters to St. Louis from New York in 1971. It is one of 15 Fortune 500 companies located in Missouri.

The company's departure is considered a blow to the city's image and comes shortly after the loss of several thousand jobs at McDonnell Douglas Corp., the nation's top defense contractor based in St. Louis. The city also is concerned about the fate of several thousand employees of troubled Trans World Airlines Inc., which operates its domestic hub at Lambert-St. Louis International Airport.

Advertisement

But DennisColeman, executive director of the St. Louis County Economic Council, noted that the city is home to headquarters for Anheuser Busch Inc., Ralston Purina Co., Monsanto Co. and other large corporations.

'Given the fact there are several major corporations, that reduces the impact on St. Louis,' he said. 'Certainly the number of jobs (lost), while high-level and well-paid jobs, are not significant in an area of roughly 1.4 million jobs.'

Based on an analysis of its payroll and local purchases, General Dynamics' 300 jobs created about 850 jobs in the area, according to the Regional Commerce and Growth Association.

RCGA President Ned Taddeucci said in a statement his organization would continue to promote the advantages of moving corporate headquarters to St. Louis -- a skilled work force, affordable housing and other factors.

General Dynamics, like other defense contractors, has been hurt by an era of fiscal restraint at the Pentagon.

The company, which has a large production plant in Fort Worth, Texas, was forced to lay off several thousand employees after the A-12 attack plane contract it shared with McDonnell Douglas was canceled in January. The Pentagon cited cost overruns and extensive delays in ending the multibillion-dollar program.

Advertisement

In February, the company reported a fourth-quarter loss of $530.1 million, including special charges of $858.9 million. For the fiscal year it lost $577.9 million.

General Dynamics said employees who are not offered positions in Washington or the corporate service center would be encouraged to continue with the company during the transition.

They will be offered a career transition package when they ultimately leave the company. The package will include career counseling, an enhanced severance benefit and an additional financial benefit for employees who have not found jobs at the end of the transition period.

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