2941 Fairview Park Drive, Suite 100
Falls Church, VA 22042-4153
LCS Design Concept
Index Membership: S&P 100
Sector: Industrial Goods
Industry: Aerospace/Defense Products & Services
Full Time Employees: 83,500
General Dynamics XM996
Mr. Nicholas D. Chabraja, 65
Chairman and Chief Exec. Officer
Born: November 6, 1942, in Gary, Indiana.
Education: Northwestern University, BA, 1964; Northwestern University, JD, 1967.
Family: Married Eleanor (maiden name unknown; philanthropist).
Career: Jenner & Block (law firm), 1968–1997; 1984–1993, partner; 1986, special counsel to United States House of Representatives; 1992, special counsel to General Dynamics; General Dynamics, 1993–1994, senior vice president and general counsel; 1994–, director; 1994–1996, executive vice president; 1997 (1 January–31 May), vice chairman of the board; 1997–, chief executive officer and chairman of the board.
Nicholas (Nick) Chabraja (pronounced cha-brah-ya) first made his mark as a lawyer, eventually serving as special counsel to the House of Representatives in 1986 during the Senate impeachment trial of Judge Harry E. Claiburne. For about twenty years he worked on cases for General Dynamics. It was because of his legal services to General Dynamics that he was able to make the shift from lawyer to business executive, becoming both general counsel and vice president for the company in 1993. He revealed an astute understanding of the problems that beset General Dynamics in the 1990s and rose to become the company's chief executive officer. He put the company on a course of expansion after years of cutting away subsidiaries and was so successful that General Dynamics averaged a 19.2 percent annual return on equity from 1997 to 2001, more than double the average for other defense contractors.
FIRST A LAWYER
Chabraja had majored in political science at Northwestern University before earning a degree in law. He was an exceptional legal talent who passed the bar in Indiana in 1967 and in Illinois in 1968. Passing the Illinois bar enabled him to accept a position with Jenner & Block, a prestigious Chicago law firm that also had offices in Washington, D.C. He made his home in Lake Forest, Illinois, a suburb of Chicago, but as he advanced in the law firm, his duties carried him ever more frequently to Washington.
He had worked on the legal affairs of General Dynamics ever since becoming a partner in Jenner & Block in 1984. By the end of the 1980s General Dynamics was losing money. CEO Bill Anders, a former astronaut, sold off problematic divisions, including those making F-16 jets (to Lockheed) and Tomahawk missiles (to Hughes). By 1993 General Dynamics, which in the 1980s had been the nation's largest defense contractor, had only two divisions left: Electric Boat, which made nuclear submarines, and Land Systems, which made M1 tanks. In March 1992 Chabraja was appointed special counsel to General Dynamics to help with the corporate restructuring.
THEN A BUYER
In 1993 Chabraja joined General Dynamics as senior vice president and general counsel, and in 1994 he became a member of the board of directors, where his sharp mind and astute judgment impressed the other directors. When he became executive vice president in 1994, he began pushing for a new approach for General Dynamics, one of expansion rather than selling off the last divisions of the company. He became Anders's heir apparent, and in quick succession in 1997 he became vice chairman of the board then CEO and chairman. His contract required that he move near to Washington, D.C., and he settled in a suburb in northern Virginia. In 1997 General Dynamics had $4 billion in sales.
General Dynamics faced the choice of dissolving itself by selling what remained or using the capital it had accumulated from the sale of most of its divisions to expand its business. Times were tough for defense contractors, and most were suffering losses in revenue, but Chabraja chose to try to acquire other companies. He looked for companies available at bargain prices that could be improved by better management of their resources, and he tried to acquire companies diverse enough that General Dynamics could make money even when one industry or another was in a slump. Thus, General Dynamics bought Advanced Technology systems, which made fiber optic cables, and Bath Iron Works, which made Aegis destroyers.
In 1999 Chabraja tried his most audacious purchase, the acquisition of Newport News Shipbuilding, makers of nuclear submarines, in a deal agreed to by Newport News management. All seemed well, with shareholders of Newport News happy, but the deal was blocked by the federal government, which wanted to avoid General Dynamics' having a monopoly on the manufacture of America's nuclear submarines. In spite of that setback, Chabraja led the purchase of an ailing maker of private jets, Gulfstream Aerospace Group, concluding the deal on July 30, 1999, for $4.8 billion. Chabraja reduced the size of the company's management and initiated a program of cutting expenses. By 2002 Gulfstream accounted for 40 percent of General Dynamics' profits.
In 2001 General Dynamics bought Motorola's defense unit, which with General Dynamics' fiber optic cable business enabled General Dynamics to improve wiring and communications systems on its ships and in its tanks. In 2002 General Dynamics had $13.8 billion in sales, netting $917 million. On August 8, 2002, the board of directors of General Dynamics extended Chabraja's contract by three years, to 2005.
On March 4, 2003, General Dynamics purchased General Motors' defense division, which made armored vehicles—a good fit with General Dynamics' Land Systems' M1 tank manufacturing. On August 12, 2003, General Dynamics purchased Veridian, an information technologies company that complemented its fiber optics and communications businesses. In 2003 General Dynamics had $16.6 billion in sales, netting $1.004 billion. By 2004 the company employed 67,600 people, up from 9,000 when Chabraja had joined the company.
Although he was very much admired by coworkers and business journalists, Chabraja was a soft-spoken man who did not care for celebrity status, and he seemed uncomfortable with the public role his leadership of a major defense contractor required. He kept his private life private and his business life focused on the bottom line: "I look at any deal first from the point of view: 'Can I make money?'" he told one reporter (Forbes, January 10, 2000) about his acquisitions. During the 1990s, when the defense industry underwent a contraction of business, he looked to investing capital in enterprises that complemented his company's existing businesses and that were only marginally successful or unsuccessful, believing that such companies could be made profitable through prudent cuts in expenses and aggressive marketing. "Generally, we bought businesses at reasonable prices and improved them," he told another reporter (BusinessWeek Online, March 27, 2000). He was driven by a belief that good management could solve most problems by focusing on what the marketplace demanded coupled with an understanding that economic reality meant that any business would face temporary downturns in business and therefore should look for long-term profitability.
See also entry on General Dynamics Corporation in International Directory of Company Histories.
SOURCES FOR FURTHER INFORMATION
Banks, Howard, "General Dynamics Like a Phoenix," Forbes, January 10, 2000, p. 86.
Rubenstein, Bruce, "Back Scratching in the Boardroom: Should Law Firm Partners Sit on Clients' Corporate boards?" Corporate Legal Times, January 1995, www.aaronlaw.com/articles/archive%20articles/article01.html.
Serwer, Andy, "General Dynamics: In War and Peace, General Dynamics Is Wall Street's Favorite," Fortune.com, November 12, 2001, http://www.fortune.com/fortune/investing/articles/0,15114,373216,00.html
—Kirk H. Beetz
Mr. L. Hugh Redd, 50
Chief Financial Officer and Sr. VP
Mr. David A. Savner, 63
Sr. VP, Sec. and Gen. Counsel
Mr. Charles M. Hall, 57
Exec. VP of Combat Systems
Mr. Gerard J. DeMuro, 52
Exec. VP of Information Systems & Technology
General Dynamics Corporation provides business aviation; combat vehicles, weapons systems, and munitions; shipbuilding design and construction; and information systems, technologies, and services. The company operates through four segments: Aerospace, Combat Systems, Marine Systems, and Information Systems and Technology. The Aerospace segment designs, manufactures, and services mid-size and large-cabin business-jet aircraft for corporate, government, and individual customers. The Combat Systems segment offers wheeled armored combat and tactical vehicles; tracked main battle tanks and infantry fighting vehicles; guns and ammunition-handling systems; ammunition and ordnance; mobile bridge systems; passive, active, and reactive armor; chemical, biological, and explosive detection systems; electronic counter-measures; and composite products primarily for the United States military and its allies. The Marine Systems segment designs, builds, and supports submarines and surface ships for the U.S. Navy and commercial ships. It offers products, including nuclear-powered submarines; surface combatants; auxiliary and combat-logistics ships; commercial ships; engineering design support; and overhaul, repair, and support services.
General Dynamics workers prepare a Stryker combat vehicle for its final tests prior to re-deployment in Iraq. The Stryker is equipped with add-on slat armor to help shield it from direct fire weapons. (U.S. Army Photo by Chuck Sprague)
The Information Systems and Technology segment designs, manufactures, and delivers communications network systems, ruggedized computers, command-and-control systems, and operational hardware; wireline and wireless voice, video, and data networks; and mission simulation and training services. In addition, the company provides signals and information collection, processing, and distribution systems; special-purpose computing; data mining and fusion; special-mission satellites and payloads; and information operations services. It operates in North America, Europe, the Middle East, South America, Africa, and Asia/Pacific. General Dynamics Corporation was founded in 1899 and is based in Falls Church, Virginia.
GLAST at GD
Shares Outstanding: 402.23M
% Held by Insiders: 17.40%
% Held by Institutions: 72.10%
General Dynamics NASSCO Holds Naming Ceremony for Final BP Tanker
The Alaskan Legend to be Delivered to BP on August 18
August 12, 2006 -- SAN DIEGO, CA -- General Dynamics NASSCO, a wholly owned subsidiary of General Dynamics (NYSE: GD), today held a ceremony to name the fourth and final double-hulled oil tanker it is building for BP Shipping Ltd., the Alaskan Legend. BP Shipping Ltd. is a wholly owned subsidiary and ship operating division of BP p.l.c. (ADR: BP).
The ceremony took place at the NASSCO shipyard here. Mrs. Shirley Anne Massey, the wife of Morehouse College president and BP board member Dr. Walter Massey, was the honoree at the ceremony and is the ship’s sponsor. As ship’s sponsor, Mrs. Massey named the ship and broke the traditional bottle of champagne against it.
Construction of the Alaskan Legend began in October 2004. NASSCO placed a strong emphasis on environmental safety in its design. As with the first three Alaska-class ships, the Alaskan Legend is double-hulled, diesel-electric powered, equipped with 20 separate cargo tanks, and has all of its cargo transfer piping inside the hull rather on its decks to reduce the chance of accidental spills. The ship is capable of carrying up to 1.3 million barrels of crude oil and will operate between Alaska and western U.S. ports. NASSCO will deliver the Alaskan Legend to BP Shipping on August 18.
“The Alaska-class tankers are extraordinary ships,” said Frederick J. Harris, president of General Dynamics NASSCO. “The BP-NASSCO team worked hand-in-hand to bring them to life. BP’s focus on safety and technology drove the ship requirements, NASSCO’s engineering staff and planners created the ship’s design and build strategy, and our dedicated team of shipbuilders executed the plan.”
NASSCO received a contract from BP to build three tankers in September 2000, and a contract to build the fourth ship one year later. The first three Alaska-class ships are already in service: the Alaskan Frontier, Alaskan Explorer and Alaskan Navigator.
The Alaska-class tankers are is 287 meters (941 feet) long, have a beam of 50 meters (164 feet) and a design draft of 18.5 meters (61.5 feet). The ship’s total carrying capacity is 190,000 metric tons at its design draft.
Located in San Diego, NASSCO employs more than 4,500 people and is the only major ship construction yard on the West Coast of the United States. The shipyard has contracts to build eight T-AKE ships for the U.S. Navy and as many as 14 product carrier tankers for U.S. Shipping Partners L.P. Additional information on NASSCO can be found at www.nassco.com.
BP is the single, global brand formed by the combination of the former British Petroleum, Amoco Corporation, Atlantic Richfield (ARCO) and Burmah Castrol. BP is a global producer, manufacturer and marketer of oil, gas, chemicals and renewable energy sources. Every day, BP provides energy solutions to approximately 13 million customers in more than 100 countries. More information about BP is available at www.bp.com.
General Dynamics, headquartered in Falls Church, Virginia, employs approximately 81,900 people worldwide and had 2005 revenue of $21.2 billion. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation. More information can be found online at www.generaldynamics.com.