Ethics-Governance: Article: General Dynamics: An Ethics Turnaround (Ethikos Archives)

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General Dynamics: An Ethics Turnaround (Ethikos Archives) General Dynamics: An Ethics Turnaround (Ethikos Archives)March/April 1990 - By Andrew Singer. General Dynamics Corporation: An Ethics Turnaround?In May 1985, the chairman of General Dynamics Corporation received a three-page letter from the U.S. Secretary of the Navy, John Lehman. In that letter, the Secretary expressed doubts about the Navy’s relationship with the company. He gave notice that pending management changes, the processing of the Navy’s contracts with General Dynamic’s Electric Boat and Pomona divisions would be suspended.It was a letter that followed dramatic Congressional hearings that detailed, among other things, the company’s extensive bestowing of “gifts” upon the father of the nuclear submarine, Admiral Hyman G. Rickover, and an elaborate scheme to juggle the books and overcharge the government on submarine contracts.The hearings also recalled the bizarre flight of a former GD executive vice president, P. Takis Veliotis, to Greece; there he admitted to taking kickbacks while with the company in the 1970s and charged other senior company executives with corruption as well.While the Congressional hearings and the press coverage were discomfiting, Lehman’s letter scalded. It struck directly at the company’s relationship with the government, on whose military budget the St. Louis-based company was largely dependent.Ordered to establish a code of ethics“What do you do when you get a letter like that?” asks Kent Druyvesteyn, the company’s Staff Vice President, Ethics Program. “You read it very closely.”Three of the management changes Lehman called for concerned overhead billing issues. Full Article: http://www.singerpubs.com/ethikos/html/generaldynamics.html


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