General Dynamics to relocate in Northern Va.


General Dynamics Corp., the nation's second-largest defense contractor, rejected Maryland's advances and announced yesterday that it would move its corporate headquarters to Northern Virginia from St. Louis.

The announcement was a blow to state officials who have spent the last three weeks wining and dining executives of the maker of the F-16 jet fighter and Tomahawk cruise missile.

Gov. William Donald Schaefer, describing himself as "very, very disappointed" said he didn't understand why Maryland had lost the competition for the prestigious headquarters.

The state had offered the company an incentive package worth $2.5 million for training, relocation assistance and other expenses.

The governor also said that General Dynamics officials had indicated during a State House dinner last week that they were interested in $10 million worth of incentives to locate in Maryland. "It may have been presented to Randy [J. Randall Evans, Secretary of Economic and Employment Development] as a joke, but we took it very serious," Mr. Schaefer said.

"What I don't understand," he added, "is that they got less than $500,000 from Virginia. We offered a better package than anyone else. We had a great offer."

As to General Dynamics' hint of a $10 million incentive package, the governor added: "We told them we couldn't go for that."

"They just decided Virginia was better," he said.

If General Dynamics, which had revenues of $10.2 billion last year, had chosen one of the considered sites in Prince George's and Montgomery counties, the company would have become the state's biggest locally-based company.

Last month, General Dynamics Chairman William A. Anders said he would move the company's 200-person headquarters to the suburbs ofWashington so that the executives could be closer to decision-makers in Congress and the Pentagon.

The company has said it will ask 115 of its current workers to move, and will hire the rest at its new site.

Company spokesman Alvin Spivak yesterday declined to say why the company had chosen Northern Virginia.

"We're not really going to get into specifics. We would have been happy in either place. It was a very close call," he said.

Mr. Spivak did note, however, that General Dynamics already has a 60-person office in Arlington, Va. The company expects to choose the exact location of the new headquarters in a few weeks.

In a written statement, Virginia Gov. L. Douglas Wilder said he was pleased by the company's decision yesterday.

Laurence H. Framme, economic development secretary for Virginia, said his state's $500,000 incentive plan would help General Dynamics pay for training of clerical staff and some other "acclimation" expenses.

Mr. Framme said he didn't know exactly why General Dynamics had chosen Virginia, but that the company and the state officials "were very concerned about not making it a bidding war."

This is not the first corporate move by General Dynamics. The company moved to St. Louis from New York in 1971, and before that had moved to New York from San Diego.

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