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
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LOCKHEED MARTIN (LMT): Free Stock Analysis
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NORTHROP GRUMMN (NOC): Free Stock Analysis
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