YOU ARE HERE: LAT HomeCollections

General Dynamics Fighter Unit Is Eyed by Lockheed


Lockheed Corp. is considering buying General Dynamics Corp.'s massive jet fighter division, its partner in development of the Air Force's advanced F-22 fighter, a source familiar with talks between the two companies said Tuesday.

The Ft. Worth-based division accounts for about half of General Dynamics' net revenue, and analysts estimate that the unit could bring between $1 billion and $1.5 billion in a sale.

General Dynamics has also talked with Seattle-based Boeing Co., another F-22 contractor, about a sale or possible joint venture, according to a recent report in the Ft. Worth Star-Telegram.

Spokesmen for the three companies declined to comment.

Lockheed, based in Calabasas, is heading the multi-company team that is developing the F-22, the Air Force's next-generation tactical combat jet.

If Lockheed prevails in its effort to buy the General Dynamics division, it would control two-thirds of the contract. It would likely seek to manufacture the F-22 at its plant in Marietta, Ga., said Jack Modzelewski, an analyst at PaineWebber Inc. in New York.

Congress has not yet made a final decision on whether to fund production of the politically controversial F-22, the Pentagon's most expensive proposed weapons program.

"There's a strong ring of plausibility to it," said Cai von Rumohr, an aerospace analyst at Cowen & Co. in Boston. "Whether (a deal) actually happens, I think we'll see."

General Dynamics now builds the F-16 at its Ft. Worth plant. Any buyer of the division would get the F-16 production, but the plant is government-owned and probably would not be included in any deal, analysts said.

The division reported net sales of $2.29 billion for the first nine months of 1992, with $149 million in operating earnings.

After rising $3 on Monday, General Dynamics' stock closed down $1.875 a share to $98.125 Tuesday in trading on the New York Stock Exchange.

Los Angeles Times Articles