General Dynamics was
officially established on April 24, 1952, when the shareholders of
Electric Boat Corporation, a company based in Washington and New York
States, followed the recommendation of its president and chief executive
officer, John Jay Hopkins, and voted to change the company's name. Hopkins
felt the name change was necessary because Electric Boat was no longer
only a shipbuilder and had diversified its business after World War II.
As World War II concluded
in 1945, Electric Boat had plenty of capital but had nothing to buy and
nothing to build. With no work, its workforce shrunk from 13,000 to 4,000.
At the same time, the aircraft firm Canadair Ltd., which was owned by the
Canadian government, began to weaken and the Canadian government put it up
for sale. Hopkins bought the company for $10 million in 1946, a purchase
that is still seen as one of the greatest bargains in the history of
aviation. Even by the Canadian government's calculations, the factory
alone was worth more than $22 million without including the value of the
planes being built or the spare parts on location. With the purchase of
Canadair and development of the USS Nautilus, the world's first
nuclear-powered submarine, Electric Boat was no longer in a single market.
When Hopkins purchased
Canadair, its production line and inventory systems were in disorder. To
start the process of returning Canadair to profitability, Hopkins
installed Canadian-born mass-production specialist H. Oliver West as
president. West's performance was remarkable. He reformed the inventory
system and production lines, and soon their "North Stars," modified
Douglas DC-4 airplanes, began to roll into service for Trans Canadian
Airline (TCA). The turnaround was so remarkable that Canada Pacific and
British Overseas Airways Corporation (BOAC) placed new orders that were
filled sometimes eight months in advance.
In January 1948, Thomas
Finletter, who chaired the Air Policy Commission under President Harry S.
Truman, issued a national air policy report titled "Survival in the Air
Age." The report stated the need for a large peacetime Air Force, and
coupled with the detonation of an atomic bomb by the Soviets, led to a
surge in military work, especially in aviation. This surge in military
work occurred in Canada as well as in the United States, and Canadair won
numerous contracts to build fighter jets for the Royal Canadian Air Force
(RCAF). These contracts included the T-33, a two-seat jet trainer, a fleet
of long-range Argus reconnaissance transports, two military versions of
the civilian Britannia passenger plane, and the North American Aviation
F-86 Sabre Jets, which flew in the Korean War. Between 1950 and 1958,
1,815 Sabre Jets were built.
Hopkins' next acquisition
was Convair from the Atlas Group in March 1953. Because Convair was based
in the United States, General Dynamics acquired the capability to bid on
U.S. aerospace contracts, perhaps one of the greatest advantages of the
merger. Over the next 40 years, Convair operated largely as an independent
company under the General Dynamics umbrella. It would produce several
notable aircraft, including the 880/990 series jetliner, the F-102A, and
the B-58 Hustler. It would also develop the first intercontinental
ballistic missile (ICBM) as well as launch vehicles that were used to lift
NASA astronauts and satellites into space.
During the late 1950s and
early 1960s, General Dynamics had major management problems. Frank Pace
replaced Hopkins, who was severely ill, in late 1957. During the
development and production of the Convair 990, John Naish succeeded
General Joseph McNarney as the head of Convair. Colonel Henry Crown became
the company's largest shareholder and merged his Material Service
Corporation with General Dynamics in 1959. Naish left in May 1961, taking
most of Convair's top people with him. General Dynamics reorganized into
Eastern Group New York and Western Group San Diego. The Western Group
housed all aerospace activities and discontinued the Convair label. Frank
Pace retired under pressure in 1962 and Roger Lewis, former Secretary of
the Army and Pan American Airway's chief executive, was brought in as the
new General Dynamics chief executive.
When the dust settled from
the management overhauls in the early 1960s, General Dynamics teamed with
aerospace company Grumman to bid on the TFX (tactical fighter
experimental), a Navy-Army dual-purpose variable wing airplane. After four
rounds of bids, the General Dynamics-Grumman team beat Boeing and won the
contract to build the General Dynamics F-111. Winning the contract assured
that the General Dynamics plant in Fort Worth, Texas, would stay open.
The F-111 first flew in
December 1964. It completed its first variable-geometry test flight, which
tested how well its wings moved between the swept-back and straight
configurations, in January 1965. The F-111B flew in May 1965, but the Navy
said that it was too heavy for use on aircraft carriers. The F-111 never
achieved its dual purpose and had a poor record in Vietnam. With an
unacceptable Navy version, estimates for 2,400 F-111s, including exports,
were sharply reduced, but General Dynamics still managed to make a
$300-million profit. The government thought it would save money by
building a dual-purpose airplane, but it turned out that it would have
been cheaper to build two separate planes.
In May 1965, General
Dynamics reorganized into 12 operating divisions. The board decided to
build all future planes in Fort Worth, ending plane production at Convair-San
Diego, but continuing with space and missile development. In October 1970,
Roger Lewis left and David S. Lewis from McDonnell Douglas was named CEO.
Lewis required that the company headquarters move to St. Louis, and
General Dynamics moved in February 1971.
In 1972, General Dynamics
bid to build the Air Force's lightweight fighter (LWF). It was similar to
the F-15 but smaller, lighter, cheaper, and more easily maintained.
General Dynamics and Northrop were awarded contracts to build competing
prototypes. General Dynamics, urgently needing a production successor to
the F-111, put together its own version of Lockheed's Skunk Works, its
advanced concepts laboratory, and developed the YF-16 in record time. The
YF-16 first flew in January 1974 and won over the Northrop F-17 prototype
in fly off tests. It entered production as the F-16 in January 1975 with
an initial order of 650 and a total order of 1,388. The F-16 also won
contracts worldwide, winning over the F-17 and foreign competition.
European militaries ordered 348 planes to be built at plants in Belgium
and the Netherlands. F-16 orders totalled more than 4,000, making it the
largest and most successful program for General Dynamics since World War
II.
In 1976, General Dynamics
sold the struggling division Canadair back to the Canadian government for
$38 million. In 1984, General Dynamics had four divisions: Convair in San
Diego, General Dynamics-Fort Worth, General Dynamics-Pomona, and General
Dynamics-Electronics. In 1985, General Dynamics acquired Cessna,
reflecting the company's desire to diversify into commercial aviation.
In late 1987, teamed with
McDonnell Douglas, General Dynamics received the contract for the stealth
A-12 naval strike aircraft. The A-12 had a fixed $4.8-billion development
budget and a strict timetable. The program experienced serious delays and
development was cancelled in January 1991.
In 1985, the Space Systems
Division was formed from the Convair Space programs. Also in 1985, plans
went forward to use the Centaur upper stage to deliver Space Shuttle
payloads. (General Dynamics had been involved in the Atlas-Centaur launch
vehicle since the late 1950s.) However, NASA cancelled use of the
liquid-fuelled Centaur for Space Shuttle missions after the 1986
Challenger accident because of increased safety concerns. The upper
stage has continued use on unpiloted missions, including some of the
Geostationary Operational Environmental Spacecraft (GOES) meteorological
satellites and on the Cassini orbiter, as well as on some commercial
satellites.
In the 1990s, after the
death of Henry Crown, the company's largest stockholder for 40 years,
General Dynamics sold many of its business units. General Dynamics sold
Cessna to Textron in January 1992, its missile operations to General
Motors-Hughes in May 1992 for $450 million, its Fort Worth Division to
Lockheed for $3 billion in March 1993, and its Space Systems Division to
Martin Marietta in 1994. The Convair Aircraft Structure unit went to
McDonnell Douglas in 1994 and the Convair division was closed in 1996. In
1999, General Dynamics acquired Gulfstream Aerospace, a small airplane
producer.
In 2001, General Dynamics
Aerospace Division produces the Gulfstream V, V-SP, G200, and G100 and
provides aviation services in avionics, airframes, engines, and
refurbishments.