General Dynamics Corporation (NYSE:GD), the world’s fourth largest defense contractor, said Monday it will combine two of its combat systems units and shut down the Charlotte, N.C., office of one of them by the end of the year.
U.S. weapons makers have been preparing for a new era of defense austerity that still sees the country spending by far the most in the world on defense. The sector is facing over $50 billion in cuts next year and further cuts in ensuing years.
"In the face of changing demand in some of our markets and increasing competition across the board, we have determined that consolidation is the best way to maintain the competitiveness and profitability of these lines of business,” said Mark C. Roualet, executive vice president of the Combat Systems group for General Dynamics, in announcing the move.
The maker of the M1 Abrams tank and the Gulfstream jet said it will fold its Armament and Technical Products unit, which makes aircraft gun systems, ordnance, axle components for off-road land vehicles and missile launch tubes, into its Ordnance and Tactical Systems unit, which makes artillery shells, light strike vehicles and the Hellfire warhead. These units employ about 6,000 workers, mostly in the United States and Canada.
The company didn’t say how many, if any, workers would be laid off. The Charlotte headquarters for the Armament and Technical Products unit employs about 90 people, according to Reuters, but some are likely to be retained and transferred to other parts of the company.