General Dynamics acquires a GM defense business

DETROIT — General Dynamics Corp. has completed its purchase of General Motors Corp.'s business that makes armored vehicles for $1.1 billion in cash, the companies said Monday.

The deal, first announced late last year, comes as GM works to shore up its finances by shedding operations not related to its core automotive business.

The world's largest automaker said the sale will help the company reach its goal of generating $10 billion in cash in 2003. GM said the sale will result in an after-tax gain of some $600 million in the first quarter.

Ronald Tadross, an analyst with Banc of America Securities, had estimated GM would gain $770 million after taxes for the sale. He said of greater interest right now is GM's stake in Hughes Electronics Corp., which the automaker is shopping around.

GM executives said in early January they'd announce plans for Hughes within two months. On Friday, the automaker said it would contribute 11 percent of its Hughes shares to GM's underfunded pension and health care plans.

Without the sale of Hughes and other assets, Tadross said, it's not certain GM will be able to make future pension plan contributions and dividend payments.