Tuesday, December 23, 2008

Electric Boat wins $14B, eight-submarine deal

By Brendan Lynch

General Dynamics Corp. reports its Electric Boat subsidiary has landed $14 billion from the U.S. Navy for the construction of eight submarines.

Under the contract, Electric Boat will build eight Virginia-class submarines with its partner, Northrop Grumman Corp. The companies will begin construction of one submarine per year in 2009 and 2010, and two ships per year from 2011 to 2013. The first ship to be built has been named the “North Dakota,” the company said. The last ship is planned to be completed in 2019, according to General Dynamics (NYSE:GD).

The Virginia-class submarine is built for post-Cold War operations, including anti-submarine and surface ship warfare; special operation forces delivery; strike; intelligence, surveillance and reconnaissance; irregular warfare; and mine warfare, General Dynamics said.

Last week, Electric Boat won $46.5 million worth of additional work from the Navy related to the submarine USS North Carolina. The same week, Electric Boat landed $16.8 million from the Navy for services related to the redesign of a submarine-based weapons launcher. And last month, Electric Boat landed $286 million from the U.S. Navy for work on nuclear submarines. Under the contract, which could reach a total value of $1.8 billion, Electric Boat, based in New London, Conn., will provide design, engineering, material and logistics support, and R&D for submarine maintenance and modernization activities, training and cost reduction support.

General Dynamics, headquartered in Falls Church, Va., employs approximately 91,200 people worldwide. The defense contractor reported a 2007 net income of $2.1 billion on revenue of $27.2 billion.