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General Dynamics (GD) Arm Wins Deal to Support Abrams Tank

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General Dynamics Corporation’s (GD - Free Report) business unit, Land Systems, recently clinched a $47.6-million contract involving Abrams main battle tanks.

Per the deal, General Dynamics will provide technical support for the Abrams tank. The work related to the deal will be performed in Sterling Heights, MI. The contract, which is expected to be completed by Nov 29, 2024, has been awarded by the U.S. Army Contracting Command, Detroit Arsenal, MI.

Significance of Abrams Tank

The M1A2 SEPv3 Abrams is the most advanced main battle tank. It sports features that are technologically advanced in communications, fire control and lethality, reliability, sustainment and fuel efficiency, along with upgraded armor. Additionally, the SEPv3 Abrams is designed to seamlessly accept future upgrades.

What’s Favoring General Dynamics?

Military spending has witnessed an increase in the past few years to modernize and upgrade the defense system to meet the current warfare requirements. In such a scenario, the demand for military tanks has increased by leaps & bounds as these form an integral part of any land warfare system.

Thus, General Dynamics stands to benefit from the increased demand as its Land Systems is the sole-source producer of two foundational products central to the U.S. Army’s warfighting capabilities — the M1A2Abrams main battle tank and the Stryker wheeled combat vehicle.

The company strives to continuously improvise on the platform and provide an upgraded version to its customers. GD is maximizing the effectiveness and lethality of the Army’s tank fleet with next-generation Abrams upgrades, providing technological advancements in communications, power generation, fuel efficiency, optics and armor.

The company is also developing an Abrams SEPv4 configuration with additional advanced capabilities, incorporating next-generation electronic architecture technology. This will allow the platform to adopt and incorporate transformative capabilities into the future.

Such capability in manufacturing combat vehicles must have enabled General Dynamics to win multiple orders for the Abrams Tank as well as system and sustainment technical support services contracts involving the same, like the latest one. This has bolstered the defense giant’s revenue generation prospects from combat vehicles.

Growth Prospects

Going forward, per the report from Markets and Markets, the global armored vehicle market is projected to witness a CAGR of 3.1% by 2027. The expanding size of the market should benefit General Dynamics as it has an established position in the armored vehicle market.

Other defense majors that are likely to benefit are BAE Systems (BAESY - Free Report) , Northrop Grumman (NOC - Free Report) and Raytheon Technologies (RTX - Free Report) .

BAE Systems designs, manufactures, upgrades and supports tracked, specialty-tracked, and wheeled and amphibious combat vehicles. Some of BAE Systems’ combat vehicles include the Armored Multi-Purpose Vehicle, CV90, CV90MkIV, CV90 IFV, etc.

Northrop Grumman is the world’s top producer of medium-caliber live and training ammunition and gun systems, with more than five million units built in the last five years.

It specializes in innovating low-cost, highly reliable precise weapons and ammunition for artillery and mortar systems, medium-caliber weapon platforms, battle tanks and individual soldiers.

Raytheon is currently teaming up with American Rheinmetall Vehicles to meet the U.S. Army’s current requirement for a true, next-generation Optionally Manned Fighting Vehicle, namely the Lynx Infantry Fighting Vehicle.

The Lynx Infantry Fighting Vehicle is a next-generation, tracked, armored fighting vehicle designed to address the critical challenges of the future battlefield.

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