Subject: [NEXTEL-1] General Dynamics wins high-tech U.S. radio deal

From: NEXTEL-1
Date: Mon, 19 Jul 2004 19:33:52 -0400

General Dynamics wins high-tech U.S. radio deal

Monday July 19 2004
By Chelsea Emery 

FARNBOROUGH, England

(Reuters) 

A team led by General Dynamics Corp. on Monday won a U.S. Army contract
valued at over $1 billion to design and develop new portable radios for
U.S. troops, the company said.

The Army said the Cluster 5 version of the Joint Tactical Radio System
family of radios marked "a major turning point" in the U.S. military's
drive to dominate battlefield information.

Mark Fried, president of GD's C4 Systems said the new radios would meet
future combat needs for years to come -- driven by new core technology
the size of credit card.

"This is the first time in modern telecommunications history that the
military will effectively leapfrog ahead of the commercial
communications market as it relates to radio capabilities," Fried said.

Rep. J.D. Hayworth, an Arizona Republican, welcomed the seven-year
$295.6 million contract, saying it would produce hundreds of new jobs at
a GD plant in Scottsdale, Arizona.

GD and Hayworth said the deal's size could reach $1 billion through 2011
if all options were exercised.

Sources familiar with the deal told Reuters that follow-on contracts to
build the new software-programmable radios for the U.S. military could
swell the overall value of the contract to $5 billion to $10 billion in
the longer-term.

The Cluster 5 version of the JTRS family of radios can be programmed
with software and uses satellite technology to provide voice, data,
images and video communications to U.S. troops, giving them
unprecedented access to more data.

The GD-led team, which included Rockwell Collins Inc., Thales SA and BAE
Systems Plc, won out over an ITT Industries Inc. team that included
Raytheon Co., Boeing Co. and Harris Corp., the sources said.

Officials at Falls Church, Virginia-based GD and Rockwell had no
immediate comment.

The team will now work to develop new hand-held radios, portable radios
to fit in backpacks and small form-fit radios as part of the JTRS
program, which will eventually replace more than 25 types of military
radios now in use.

Loren Thompson, director of the Virginia-based Lexington Institute, said
the contract was good news for GD, which also stood to gain from an
expected increase in orders for its Stryker armored vehicles.

GD shares closed 90 cents or nearly one percent higher at $97.90 on the
New York Stock Exchange. Rockwell shares closed 2 cents lower at $34.17.
(Additional reporting by Andrea Shalal-Esa)

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=5710153

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