General Dynamics completes Metro Machine acquistion

NORFOLK

General Dynamics Corp. completed its acquisition of Metro Machine Corp. on Monday.

The deal gives General Dynamics, one of the Navy's principal shipbuilders, the capability to maintain and repair ships in the Navy's East Coast home.

Metro Machine, which employed 400 people on the Berkley riverfront across from downtown, has become part of General Dynamics NASSCO, a unit that includes a large shipbuilding and repair yard that serves the Navy in San Diego.

Metro Machine now will be known as General Dynamics NASSCO Norfolk, said Rob Doolittle, a spokesman for General Dynamics, based in Falls Church.

"The addition of Metro Machine enhances our ability to compete in the growing naval ship repair market," Fred Harris, president of General Dynamics NASSCO, said in a statement. "We have added a solid team with a successful track record that will strengthen our ability to deliver cost-effective maintenance and repair services to the U.S. Navy on the East Coast."

Metro Machine has been in the Navy ship-repair business since 1972 and is a prime contractor for work on frigates, dock landing ships and amphibious transport docks that are based at Navy facilities in Hampton Roads.

"We do very similar work on the West Coast," Doolittle said.

The marine division of General Dynamics, based in Falls Church, also includes Electric Boat, which builds submarines in Groton, Conn., and Bath Iron Works, which builds surface combatants such as destroyers in Bath, Maine.

General Dynamics did not disclose the value of the deal for Metro Machine, which was owned through an employee stock ownership plan. A letter to the Metro Machine employees when the deal was announced on Sept. 21 said the plan would receive $148 million after repayment of Metro's debt and other obligations.

An additional $16 million was to be placed in escrow to serve as a fund to satisfy claims General Dynamics might have, according to the letter signed by Richard Goldbach, Metro's CEO. Any remaining balance after 18 months would flow to the employee stock owners.

Metro Machine is the second Navy ship-repair yard in Hampton Roads acquired by a major defense contractor. BAE Systems bought its neighbor in Berkley, Norshipco, in 2005.

Doolittle said General Dynamics had no plans for major changes at Metro Machine because it already is a well-run operation.

With the addition of former Metro Machine employees, General Dynamics NASSCO now employs approximately 3,850 people.

Christopher Dinsmore, (757) 446-22271, chris.dinsmore@pilotonline.com