General Dynamics is Missing $1.5 Billion Due to a Canadian-Saudi Spat (excerpt)
(Source: Defense News; posted Nov. 06, 2019)
By Aaron Mehta
Saudi Arabia has suspended payment on a C$15 billion contract for Light Armored Vehicles it signed in 2014 with the state-owned Canadian Commercial Corp., which in turn is unable to pay prime contractor General Dynamics. (DND photo)
WASHINGTON --- An ongoing diplomatic battle between Canada and Saudi Arabia is hitting American defense firm General Dynamics hard, to the tune of about $1.5 billion in missing payments for land vehicles sold to the kingdom.

During the company’s Oct. 23 quarterly earnings call, officials from General Dynamics revealed the roughly $1.5 billion in payments Saudi Arabia currently owes for a Light Armored Vehicle contract run through General Dynamics Mission Systems–Canada.

More specifically, that figure stems from vehicles delivered to Saudi Arabia that have not been paid for, and the amount has grown quarter by quarter in the last year, according to General Dynamics filings. The number could grow as large as $2.6 billion given production that is already underway on vehicles not yet delivered, the company added.

In the quarterly earnings call, General Dynamics CEO Phebe Novakovic acknowledged that “the payments on our international program out of Canada have remained slow,” but stressed that “there no dispute on the fact that it is owed. It’s simply a question of timing, and we are still hopeful that we resolve that by the end of the year.”

Click here for the full story, on the Defense News website.


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