GD Bids for US Air Force Contract - Analyst Blog
18 Janvier 2013 - 7:29PM
Zacks
General Dynamics Corporation (GD) will
collaborate with Finmeccania’s subsidiary Alenia Aermacchi to vie
for a U.S. Air Force contract for building the advanced T-X trainer
jets for an undisclosed amount. The T-X trainer program will come
in place of the existing T-38 trainer jets and other training
systems. General Dynamics’ business arm, General Dynamics C4
systems will be the primary contractor.
General Dynamics will offer its expertise in systems integration
and sub-contract management whereas Alenia will deliver the
aircraft and provide manufacturing services.
General Dynamics will provide an Advanced Pilot Training (“APT”)
Family of Systems (“FOS”). The training program comprises flight
mockup devices, multi-media classrooms and logistics backing.
To make the bid attractive General Dynamics and Alenia have
proposed to build the jets in the U.S. and will utilize as much as
U.S. manufactured components and equipment. The U.S. Air Force
could order around 350 of these aircrafts.
The General Dynamics lead team will face competition from
partners BAE Systems Inc. and Lockheed Martin
Corporation (LMT) who are also in this contract race. The
new training jets will be a modified version of Alenia Aermacchi’s
current T-100 jet which is an alternative to the current M-346
military jets used for training purposes.
General Dynamics has also bid on a M113 armored personnel
carriers upgrade contract for the Danish Army and is the only
contender from the U.S. providing options for choosing both wheeled
and tracked variants.
Looking forward, with favorable prospects from the jet market,
we believe if the contract is awarded to General Dynamics, could
act as a growth driver for the company. In addition, the company’s
stable U.S. military vehicles business and a backlog of orders of
$51.5 billion are other potential near-term triggers.
Nonetheless, the possibility of defense spending cutbacks might
pose serious challenges to General Dynamics’ business goals. The
company holds a short term Zacks Rank #3 (Hold).
Another Zacks #3 Ranked defense operator, Northrop
Grumman Corporation (NOC) also joined forces with Agusta
Westland to compete for the U.S. Air Force's combat search and
rescue ("CSAR") helicopter deal.
Based in Falls Church Virginia, General Dynamics offers business
aviation; combat vehicles, weapons systems, and munitions; military
and commercial shipbuilding; and communications and information
technology products and services worldwide.
GENL DYNAMICS (GD): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
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