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General Dynamics' Unit Wins $1.2B IM-SHORAD Production Deal

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General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently secured a $1.22-billion contract for the production, testing and delivery of Interim Maneuver Short-Range Air Defense (IM-SHORAD) systems. The contract was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. Work related to the deal is expected to get completed by Sep 30, 2025.

IM-SHORAD Systems Attributes

The IM-SHORAD system is the U.S. Army’s newest short-range air defense system armed with Hellfire and Stinger missiles and a 30mm cannon, which is intended to provide air and missile defense against unmanned aerial systems as well as fixed wing and rotary wing threats. IM-SHORAD is also equipped to offer protection against artillery, rockets and mortars as well as regional ballistic missile threats.

What Favors General Dynamics?

With widespread geopolitical tensions around the globe, most nations are strengthening their arsenals and taking initiatives to upgrade land-combat military vehicles. Such initiatives taken on a global scale should boost General Dynamics’ growth, as it is one of the major players in the wheeled military vehicle market.

Notably, the fiscal 2021 defense budget provisions for a spending plan of $13 billion on Ground Systems. Such a stupendous budgetary allocation indicates solid growth prospects for the company through significant contract wins involving wheeled combat and armored vehicles. The latest contract win is one such example.

Looking Ahead

Per a report by the Markets and Markets research firm, the global armored vehicles market is projected to reach $15.4 billion by 2025 from $11.6 billion in 2020, at a CAGR of 5.8%. Thanks to the presence of combat-proven military vehicles within its portfolio, General Dynamics can be projected to significantly gain in this expanding market.

Additionally, such favorable trends should benefit other major combat vehicle manufacturers like Lockheed Martin (LMT - Free Report) , Raytheon Technologies (RTX - Free Report) and Northrop Grumman (NOC - Free Report) , which specialize in the manufacturing of Amphibious Combat Vehicles, Light Tactical Vehicles and other wheeled combat and armored vehicles for the U.S. Army.

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