17 May 2011
General Dynamics Land Systems and its Michigan suppliers could weather the suspension of a mainstay tank program under assault in Congress -- but not without casualties among Southeast Michigan's labor force.
A proposed three-year gap in federal funding for the M1 Abrams tank production would mean a drop of more than $500 million in current revenue from the U.S. Army Tacom Life Cycle Management Command in Warren by 2013, and hundreds of lost jobs in Michigan for the defense contractor and its local suppliers.
But even as they lobby next week to save the Abrams, General Dynamics and its suppliers are weighing contingency plans, such as ramping up foreign military sales and becoming competitive bidders on future vehicle programs.
Tacom awarded more than $535 million last year under contracts for upgrades and refits, or for systems technical support on the Abrams. The current fiscal year budget includes another $521 million.
That makes the program one of Tacom's 12 largest by contract funding and its second-largest contract with Sterling Heights-based GDLS, although a portion of that funding was already set to expire in 2012.
Only the Stryker, an eight-wheeled armored transport vehicle, is a larger GDLS contract with more than $1.4 billion in annual Tacom spending. The ground vehicles subsidiary of Falls Church, Va.-based General Dynamics Corp. has averaged around $5 billion in annual revenue in recent years.
The company and U.S. Rep. Sander Levin, D-Royal Oak, both estimated last week that the tank upgrade program supplied about 225 Michigan suppliers and subcontractors with more than $187 million in work during the past two years. (Source: Crain’s Detroit Business)
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