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United Defense Industries

United Defense has the widest product line of systems for land forces and a strong position in naval armaments. UDI, headquartered in Arlington, Va., is a leading US defense company which generated annual sales in 2004 of $2,292 million. It designs, develops and produces combat vehicles, artillery systems, naval guns, missile launchers and precision munitions, used by the U.S. Department of Defense and allies worldwide, and provides non-nuclear ship repair, modernization and conversion to the U.S. Navy and other U.S. Government agencies. UDI employs approximately 8,000 people in 25 locations in the U.S. and Sweden.

United Defense provides Combat Vehicle Systems, Fire Support, Combat Support Vehicle Systems, Weapons Delivery Systems, Amphibious Assault Vehicles, and Combat Support Services. UDI has a substantial installed base of over 100,000 combat vehicles for the US Armed Forces and international allies. Military ground vehicle applications include the Bradley fighting vehicle and derivatives (over 7,000 vehicles in active service), the M88 tank recovery vehicle and the M113 armoured personnel carrier. UDI has also secured a major role on the future manned ground vehicle and armed robotic vehicle requirements for the U.S. Army's Future Combat Systems (''FCS'') programme. Key weapon systems platforms include the Mk45 Naval Gun System and the Mk41 Vertical Launching System. UDI is well positioned as the provider of gun systems for the U.S. Navy's next generation combat ships, the DD(X) and the Littoral Combat Ship.

UDLP's programs include:

  • Bradley Family of Vehicles
  • M113 Family of Vehicles
  • M88A2 Recovery Vehicle
  • Grizzly
  • M9 ACE
  • Composite Armored Vehicle
  • M6 Linebacker
  • M7 BFIST
  • Armored Gun System
  • M4 Command and Control Vehicle
  • Battle Command Vehicle
  • Paladin
  • Future Scout and Cavalry System
  • Crusader
  • Combat Systems Integration
  • Integrated Defense Systems
  • Electric Drive Vehicles
  • FBCB2
  • Electric Gun Technology/Pulse Power
  • Advanced Simulations and Training Systems
  • Fleet Management

The first order for amphibious landing craft came in 1941 with a form from the military that simply said "Buy 1,000 LVTs - Food Machinery Corporation". During World War II, FMC produced more than 10,000 armored vehicles. Similarly, Bowen-McLaughlin York (later BMY, a division of Harsco) also began building tanks. For the last half century, both companies provided the military with high, quality reliable equipment. More than 100,000 systems have been produced.

The Food Machinery Corporation in Riverside traced its origins to three men operating in the first half of the Twentieth century. In 1903, Fred Stebler opened the California Iron Works at Ninth and Vine Streets, where he produced citrus washing, drying, sorting, and packing equipment. In 1909, George Parker bought the Riverside Foundry and Machine Works (renamed the Parker Machine Works) at Twelfth and Pachappa (later known as Commerce) Streets, where he manufactured nailing and boxing machines, as well as citrus washing equipment. Parker's Orange Box Maker was widely used by citrus packing houses in California and Florida. Business rivals, Stebler and Parker filed numerous patent infringement cases against the other, and against other competitors. Upon the advice of banker W. B. Clancy, and based on economic necessity, the two merged in 1920 to form the Stebler-Parker Company, which produced the packing and handling machines at Stebler's plant. Parker continued at his factory with his nailing devices and wire-tying machines.

During the 1920's, a third competitor entered the business. Hale Paxton developed a nailing machine that was faster, lighter, and could be easily transported to the fields, unlike Parker's machine. Paxton also made lidding machines, which were gentler to the fruit than Parker's version. Paxton's machine raised the box to the lid while Parker's machine had the lids slam down onto the boxes. Parker and Paxton competed in the field, making improvements on their lidding and box-making machinery. Meanwhile, Stebler had no competition, and thus made no improvements on his machines. He further consolidated his holdings by having packinghouses buy not just his patented machinery but entire citrus packing systems, including non-patented parts.

The California Fruit Growers Exchange encouraged the Food Machinery Corporation to enter the field of citrus machinery. FMC started as a national consolidation of various manufacturers of vegetable drying and packing equipment, fruit canning machines, and agricultural spray pumps. In the 1930's, the Stebler-Parker Company became a division of FMC under the name Citrus Machinery Co., with Stebler a large stockholder. Paxton also joined the corporation as superintendent in 1938, moving his equipment from its Orange County location to the new FMC building at Parker's old plant, which FMC bought at a liquidation sale several years after Parker's death in 1930. The Stebler location became a warehouse for FMC. The company eliminated the wire typing machinery division after the consolidation.

In 1940, FMC helped design a light amphibious tracked vehicle. The government gave FMC the contract to build military versions of the vehicle, with an assembly line in Florida and another in Riverside. Several types of the Landing Vehicle, Tracked (LVT, also known as the Water Buffalo) were produced, with Riverside responsible for the gun turret version, the LVT-4. The Riverside main plant also manufactured spare parts for the vehicles. During World War II, FMC built 11,251 LVT vehicles, receiving in 1945 the Army-Navy "E" award for outstanding war production. Changing its name to the Food Machinery and Chemical Corporation in 1948, operations continued during the Korean War with retrofitting of the older LVT models and also building different vehicle types. In 1949 a monument, complete with a LVT, was dedicated to the factory war workers at Fairmont Park near the location where they had conducted testing.

FMC Corporation (its moniker since 1961) continued operations worldwide with its chemical divisions, military contracts (including ones for the M113 and the Bradley Fighting Vehicle), and its agricultural and machinery systems. Though FMC Corporation continued to have a sales and service location in Riverside on Linden Street, it sold the building at the site of Parker's old factory and moved its citrus system and food technology headquarters to Florida.

In response to the complexities of the military industrial base and the technology developments in a declining market, FMC and Harsco merged their defense units into United Defense Limited Partnership in 1994. Business conditions for the two conglomerates then led to an exit strategy from the defense sector.

United Defense was formed when Carlyle acquired the partnership interests of FMC Corporation and Harsco Corporation for $850 million in October 1997. Carlyle beat out General Dynamics and Alliant Techsystems. United Defense brought in more than 60 percent of Carlyle's defense business. Following a leveraged recapitalization during the summer of 2001, United Defense went public in an initial public offering completed in December 2001. Carlyle completely exited this investment in April 2004.

On 26 March 2002, through its Bofors subsidiary, UDI finalised the acquisition of 100 per cent. of the outstanding stock of Cell ITS AB (''Cell ITS''), a company incorporated under the laws of Sweden and wholly-owned by Cell Network AB. Cell ITS specialises in interactive training and simulation. As consideration for the purchase, UDI paid the former owner, Cell Network AB, 45 million Swedish krona (SEK) (approximately $4 million in 2004, $4.3 million in 2003), of which 20 million SEK was held in escrow as a lien for the fulfilment of certain receivables. The transaction was accounted for as a purchase. Accordingly, the financial statements reflect the results of operations of Cell ITS from the date of acquisition.

On 07 March 2005 BAE Systems plc announced that its wholly-owned U.S. subsidiary, BAE Systems North America, Inc. had entered into a definitive merger agreement to acquire United Defense Industries, Inc. ("UDI") for $75 per share in cash, representing a total consideration for UDI's fully diluted share capital of approximately $3,974 million (2,092 million)1. Including the assumption of net debt of $218 million (115 million), the transaction values the enterprise at $4,192 million (2,207 million).

On 13 May 2005 United Defense Industries Inc. announced that shareholders of BAE Systems PLC had approved the acquisition of UDI by BAE Systems North America Inc. The transaction had also been approved by the Committee on Foreign Investment in the United States and by regulatory authorities in Sweden, Turkey, Germany, and Norway. At that time the Department of Justice is continuing to review the deal under the Hart-Scott-Rodino Act. Subject to regulatory approval and other customary closing conditions, the merger was expected to close in mid-2005. BAE completed its acquisition of United Defense on June 24 2005

UDI, together with BAE Systems' existing UK and Swedish land systems businesses, will form part of a newly created global land systems business, which will be headquartered and led in the U.S., as part of BAE Systems North America.

The combined business creates a leading international position in the fast growing land systems sector. As a result of the global war on terror and ongoing operations in Iraq and Afghanistan, the U.S. Department of Defense has significantly shifted its priorities and budget towards land systems .

UDI is also well placed to benefit from the shift in U.S. defense spending to prioritize the refurbishment and upgrade of existing systems until the next of generation of vehicles is deployed. In addition, the planned restructuring of the U.S. Army is likely to require an upgrade of the large inventory of Bradley and other UDI vehicles.

UDI is responsible for the repair and upgrade of a large number of combat vehicles for the U.S. Armed Forces, including, in particular the Bradley program of more than 7,000 vehicles. The 2005 U.S. defense budget and supplemental request include approximately $1.3 billion for resets and upgrades to the Bradley vehicle fleet.

The enlarged land systems business will hold a significant position within the Future Combat Systems program, the U.S. Army's largest procurement program, and offers enhanced opportunities in relation to programs such as the UK's FRES and Sweden's SEP, and in the export market.



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