NASSCO, Daewoo Team to Build Jones Act Ships

General Dynamics NASSCO, a wholly owned subsidiary of General Dynamics (NYSE: GD), and Daewoo Ship Engineering Company (DSEC), a wholly owned subsidiary of Daewoo Shipbuilding and Marine Engineering (DSME) based in Busan, Korea, announced a formal teaming agreement to build ships for the U.S. market under the Jones Act.

The Jones Act, among its many provisions, requires ships that carry cargo between U.S. ports to be built in the United States.

Under the agreement, DSEC will provide the detail designs, support services and some of the material necessary for ship production. NASSCO will also procure material and will provide the labor and facilities to construct the ships here.

"NASSCO is teaming with a world-class ship design and construction support company to address an important market for this shipyard," said Frederick J. Harris, president of General Dynamics NASSCO. "This extraordinary partnership with DSEC will help NASSCO retain its position as a leading builder of ocean-going Jones Act ships."

"We are very much impressed by NASSCO’s naval ship-based advanced technology, management system and well-organized personnel, as well as its business strategy," said In-Sung Lee, president and CEO of Daewoo Ship Engineering Company. "We believe this collaboration could be a cornerstone for U.S.-Korean shipbuilding partnerships as well as build upon both companies’ remarkable records in the market."

DSEC was founded to contribute to the shipbuilding industry in accordance with the global network business plan of DSME. It supplies an integrated shipbuilding engineering package that is composed of ship design, procurement and inspection services to overseas shipyards, based on DSME’s experience.

With the world’s second largest shipyard, DSME has a worldwide shipbuilding and offshore plant business. It is headquartered in Seoul, Korea, employs approximately 20,000 people worldwide and had 2005 revenue of approximately $5 billion. Additional information on DSME and DSEC can be found at www.dsme.co.kr and www.idsec.co.kr, respectively.

NASSCO is currently building its fourth double-hulled crude oil tanker for BP Shipping Company of Alaska, under a four-ship contract. In addition to the BP ships, NASSCO has contracts to build nine T-AKE combat logistics force ships for the U.S. Navy. Four of these ships are under construction; the first will be delivered later this year. Additional information on NASSCO can be found at www.nassco.com.