GDGeneral Dynamics

There have been significant developments in federal and state legislation and regulation and international accords regarding climate change. We note that you have not discussed the impact of pending or existing climate change-related legislation, regulations, and international accords in your SEC filing.

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Please revise your disclosure to identify material existing climate change-related legislation, regulations, and international accords and any material effect on your business, financial condition, and results of operations.

General Dynamics has not identified any pending or existing legislation, regulations or international accords regarding climate change that we expect to have a material effect on General Dynamics’ business, financial condition or results of operations.

Nevertheless, in response to your comment, we will add new disclosures in our Annual Report on Form 10-K for the fiscal year ending December 31, 2021 (the “2021 Form

10-K”) in the second paragraph under the heading “Item 1.

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Business—Regulatory Matters—Environmental” (new text compared to the corresponding text in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”) is underlined):

Operating and maintenance costs associated with environmental compliance and management of contaminated sites are a normal, recurring part of our operations. Historically, these costs have not been material. In addition, we could be affected by future laws or regulations imposed in response to concerns over climate change.

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Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in product designs or facilities and could increase environmental compliance expenditures, including increased energy and raw materials costs. Environmental costs are often recoverable under our contracts with the U.S. government. Based on information currently available and current U.S. government policies relating to cost recovery, we do not expect continued compliance with environmental regulations, including costs associated with changes in environmental and climate change laws or regulations, to have a material impact on our results of operations, financial condition or cash flows. For additional information relating to the impact of environmental matters, see Note O to the Consolidated Financial Statements in Item 8.

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We note that you refer to several climate-related projects in your CSR report. Please revise your disclosure to identify any material past and/or future capital expenditures for climate-related projects. If material, please quantify these expenditures.

Sustainability Report, General Dynamics has identified climate-related projects that illustrate tangible actions that we have taken or plan to take to reduce greenhouse gas emissions and operate a more sustainable business. None of these past or planned climate-related projects, however, individually or in the aggregate, involved material capital expenditures or would require material future capital expenditures. Read in the reply ↗

To the extent material, discuss the indirect consequences of climate-related regulation or business trends, such as the following: • decreased demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources; • increased demand for goods that result in lower emissions than competing products; • increased competition to develop innovative new products that

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result in lower emissions; and • any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.

We have not identified any material indirect consequences of climate-related regulation or business trends. In our three defense segments—Marine Systems,

Combat Systems and Technologies—we design, manufacture and sell products to our U.S. Government customers on the basis of the customers’ specifications. If our U.S. Government customers were to include a specification relating to greenhouse gas emissions, carbon-based energy sources or other similar measures for one or more products, these more stringent standards would apply equally to all competing bidders.

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As a result, there are no such indirect consequences that are material with respect to these segments.

For our Aerospace segment (including Gulfstream and Jet Aviation), we disclosed in the 2020 Form 10-K that aircraft performance and new-product innovation are important competitive factors for our customers. See “Item 1. Business—Competition—Business Jet

Aircraft Market Competition.” An important element of aircraft performance is aircraft efficiency—in particular, fuel efficiency. We have disclosed that we are committed to investment in R&D to broaden customer offerings while improving performance. For instance, we noted that our investment in our two most recent additions to the Gulfstream fleet—the G500 and G600—included among other things the development of a new wing, new avionics, and new fuselage that improve performance, resulting in improved fuel efficiency, longer ranges, and faster speeds compared to the aircraft that they are replacing. See “Item 1. Business—Business Overview—Aerospace”. In addition, we disclosed that a commitment to sustainability and the reduction of aviation’s carbon footprint make up a part of our strategy. We direct you to the following passage (see id.):

The Aerospace segment is committed to sustainability and the reduction of aviation’s carbon footprint. In support of this strategy,

Gulfstream and Jet Aviation offer sustainable aviation fuel through our combined services network and lead the industry in total gallons supplied to the business jet market. Furthermore, we offer carbon offset credits to our customers, enabling them to operate aircraft on a carbon-neutral basis.

To the extent that climate-related regulation or business trends introduce material indirect consequences to our business, we will include appropriate disclosure in our future SEC filings.

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If material, discuss the significant physical effects of climate change on your operations and results. This disclosure may include the following: • severity of weather, such as floods, hurricanes, sea levels, extreme fires, and water availability and quality; • quantification of material weather-related damages to your property or operations; • potential for indirect weather-related impacts that have affected or

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may affect your major customers or suppliers; and • any weather-related impacts on the cost or availability of insurance.

We have not identified any significant physical effects of climate change on our operations and results that are material to General Dynamics. We employ contingency plans (e.g., plans to relocate Gulfstream aircraft in the event of a potential hurricane affecting our Savannah, Georgia plant), insurance and other strategies to mitigate such circumstances. Read in the reply ↗

Disclose the material effects of transition risks related to climate change that may affect your business, financial condition, and results of operations, such as policy and regulatory changes that could impose operational and compliance burdens, market trends that may alter business opportunities, credit risks, or technological changes

Like most manufacturing companies, General Dynamics faces transition risks and opportunities related to climate change due to policy and regulatory changes, market trends and other changes. At this time, however, we do not consider these risks and opportunities to be material to General Dynamics’ business, financial condition, and results of operations. Read in the reply ↗

Disclose any material litigation risks related to climate change and the potential impact to the company.

General Dynamics has not identified any material litigation risks related to climate change. Read in the reply ↗

If material, provide disclosure about your purchase or sale of carbon credits or offsets and any material effects on your business, financial condition, and results of operations.

General Dynamics does not purchase or sell carbon offsets that are material to our business, financial condition or results of operations. We direct your attention, however, to the disclosure in our 2020 Form 10-K under the heading “Item 1. Business—Business Overview—Aerospace,” in which we state that our Aerospace segment “offer[s] carbon offset credits to our customers, enabling them to operate aircraft on a carbon-neutral basis.”

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We would welcome the opportunity to discuss these comments with you further.

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In the meantime, please do not hesitate to contact me with any questions about these matters.

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We note your response to prior comment 1. As part of your revised disclosure, please include language regarding the difficulties involved in assessing the timing and effect of changes in environmental and climate change laws or regulations.

to your comment, in our 2021 Form 10-K, we will further modify the second paragraph under the heading “Item 1. Business—Regulatory Matters—Environmental” as follows (new text compared to the proposed text in our Initial Response Letter is underlined):

Operating and maintenance costs associated with environmental compliance and management of contaminated sites are a normal, recurring part of our operations. Historically, these costs have not been material.

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In addition, we could be affected by future laws or regulations imposed in response to concerns over climate change, the timing and effect of which are difficult to assess.

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Tel: 703-876-3000 jaiken@generaldynamics.com

Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in product designs or facilities and could increase environmental compliance expenditures, including increased energy and raw materials costs. Environmental costs are often recoverable under our contracts with the U.S. government. Based on information currently available and current U.S. government policies relating to cost recovery, we do not expect continued compliance with environmental regulations, including costs associated with changes in environmental and climate change laws or regulations, to have a material impact on our results of operations, financial condition or cash flows. For additional information relating to the impact of environmental matters, see Note O to the Consolidated Financial Statements in Item 8.

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We note your response to prior comment 2 states that none of the past or planned climaterelated projects, individually or in the aggregate, involved material capital expenditures or would require material future capital expenditures. Provide us with additional analysis supporting this statement, including quantitative information and a description of your climate-related projects.

to prior comment two in the Initial Comment Letter, which stated that none of the past or planned climate-related projects, individually or in the aggregate, involved material capital expenditures or would require material future capital expenditures, is based on our rigorous internal process for reviewing and approving significant capital expenditures, as well as a review of quantitative information relating to the projects identified in the Corporate Sustainability Report (“CSR”) and referenced in the Initial Comment Letter.

Our process for reviewing and approving proposed capital

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expenditures includes any projects that involve climate-related elements. Our business units have authority to undertake capital expenditure projects up to a threshold of between $1.5 million and $2.5 million depending on the business. Any project that is expected to exceed those capital expenditure levels requires approval by our

Chief Executive Officer or our Board of Directors.

As to quantitative information about the past and planned projects referenced in the CSR, the largest of these past or planned projects, relating to projects identified at Gulfstream’s Savannah, Georgia site, was less than $10 million individually, and the aggregate capital expenditures for the identified projects in the CSR is approximately $15 million. For reference, this is less than 2% of our capital expenditures for 2020 of $967 million. A complete description of these climate-related projects is included in our CSR and included as Exhibit A for your reference.

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Your response to prior comment 3, which states that you have not identified any material indirect consequences of climate-related regulation or business trends, appears to be conclusory without providing sufficient supporting detail.

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Please provide us with additional information explaining how you assessed the indirect consequences of climaterelated regulation or business trends for your defense segments and your Aerospace segment, including with regard to the individual items noted in our prior comment.

General Dynamics assesses the indirect consequences of climate-related regulation or business trends through its comprehensive risk-management program, which encompasses all of our segments. The risk management program seeks to identify current and future threats to revenue and earnings (which would include an assessment of all of the individual items noted in the Staff’s prior comment, including (a) decreased demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources; (b) increased demand for goods that result in lower

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emissions than competing products; (c) increased competition to develop innovative new products that result in lower emissions; and

(d) any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions).

Under our risk management program, the Board oversees management’s identification and prioritization of risk, focusing on the most significant risks facing the company that could have a substantive financial or strategic impact. Senior management is responsible for day-to-day risk management and conducts a thorough assessment through internal management processes and controls. The Chief Executive Officer and senior management team provide the Board with a dedicated and comprehensive assessment of material risks at least twice per year, and the Board is briefed throughout the year as needed on specific risks facing the company. In our process, upstream, downstream and operational risks are also assessed for potential financial or strategic impact holistically across the company, taking into account the totality of the circumstances, including quantitative analyses of potential financial and operational impact as well as qualitative factors such as compliance with laws, pending regulations and the potential effect on our reputation. Management reviews each risk and opportunity and determines the appropriate path forward.

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In response to prior comment 3, you explain that if your U.S. Government customers were to include a specification relating to greenhouse gas emissions, carbon-based energy sources or other similar measures for one or more products, these standards would apply equally to all competing bidders.

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Tell us how you would be affected by increased competition to develop products that result in lower emissions if required by your U.S. Government customers.

Increased competition to develop products that result in lower emissions, relate to carbon-based energy sources or other similar measures, if required by our

U.S. Government customers, would affect us in the same way as increased competition to develop any other product requiring significant new specifications. This increased competition could result in lost or decreased revenue, increased costs, or impact on market share if existing competitors, or new entrants, develop better or more cost-efficient solutions than we do. In any competitive bid to provide a product, our U.S.

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Government customer includes numerous specifications, often requiring innovative solutions that may not yet have been developed. A specification relating to greenhouse gas emissions, carbon-based energy sources or other similar measures for one or more products is no different than any number of other specifications that require that we innovate or develop new products and technologies. While we believe we would be well-positioned to compete for projects involving any such specifications in the same manner as we have done in the past to remain competitive, it is possible that increased competition could affect revenues and costs.

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Your response to prior comment 4 states that you have not identified any significant physical effects of climate change on your operations and results that are material, but does not appear to include adequate support for this statement. Please provide us with additional detail regarding the physical effects of climate change, including the items specifically noted in our prior comment.

We provide additional detail as to each item in prior comment 4 of the Initial Comment Letter in turn:

Severity of weather, such as floods, hurricanes, sea levels, extreme fires, and water availability and quality - We do not anticipate that the severity of weather, such as floods, hurricanes, sea levels, extreme fires, and water availability and quality will have a material impact on our operations or results. In particular, business units potentially affected by severe weather address and mitigate the risk through our corporate risk management process.

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For example, in instances where a severe wind event risks physical damage to a facility, local management is responsible for monitoring and mitigating the risk, and reports to the Chief

Executive Officer regarding the risk and mitigation. Based on insurance data modeling, two of our largest sites – Groton, CT, and Savannah, GA – have the greatest potential loss exposures to hurricane, storm surge and flood events. General

Dynamics and our Groton, CT, and Savannah, GA, facilities have recognized and assessed the impact of these types of events for many years, and business unit management have developed and implemented specific procedures and business continuity plans to mitigate the risks to our staff, facilities and operations. These plans have been reviewed with senior leadership and are continually refined as needed. We also do not face material risks relating to the other effects listed in the Initial

Comment Letter, including sea levels, extreme fires, water availability and quality.

Quantification of material weather-related damages to your property or operations - We have not incurred any material costs arising from weather-related damages to property or operations in recent years.

Potential for indirect weather-related impacts that have affected or may affect your major customers or suppliers - We have evaluated the potential for indirect weather-related impacts that have affected or may affect our major customers or suppliers. We have a diversified customer base across the globe, including our largest customer, the U.S. Government. We have concluded that there is no material risk relating to indirect weather-related impacts that would affect our major customers.

As to our suppliers, each of our business units is responsible for identifying, planning for and mitigating risks in its operations and supply chain, including risks that arise from weather-related impacts that may affect their major suppliers. We have a company-wide supply chain management counsel, in which business units contribute their experiences and strategies to enable early identification of these risks across the enterprise and to allow business units to learn from each other’s experiences to improve risk mitigation and strategic planning. Through this process, we have not identified any potential for indirect weather-related impacts that materially affect our suppliers.

Any weather-related impacts on the cost or availability of insurance - The forecasted increase to our annual premiums due to the impact of climate change is $2 million.

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From your response to prior comment 5, we note that you face transition risks and opportunities related to climate change, but they are not considered to be material. Tell us about the transition risks you have identified related to climate change and explain how you concluded that they are not material to your business, financial condition, and results of operations.

We have concluded that potential transition risks are not material based on the same rigorous risk-management process that we apply to all potentially material risks. A transition risk that we have identified is the possibility of increased costs resulting from policy and regulatory changes driven by climate change concerns. For example, we face the potential adoption and implementation of carbon-pricing mechanisms in the United Kingdom and certain other European countries where we do business.

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We manage this risk by actively considering our use of carbon energy sources and seeking cost-effective methods to reduce our exposure to carbon pricing processes. Each business unit is responsible for actively monitoring the regulation in the jurisdictions relevant to it, adopting specific relevant mitigations and communicating to senior management their evaluations and strategies for adapting to significant regulatory changes. Based on this risk management process, we have concluded that there is no material risk to our business, financial condition, or results of operations arising from this particular transition risk.

A second transition risk that we have identified is a change in customer demand for our products and services driven by climate-related considerations. These changes in demand could take the form of new specifications by our U.S. Government customer in our defense segments, or changes in preferences by our business aviation customers in our

Aerospace segment. For example, as referenced in our Initial Response Letter, we disclosed in the 2020 Form 10-K that aircraft efficiency and new product innovation are important competitive factors for our customers. After evaluation, we have concluded that these changes in customer demands from a transition to a low-carbon economy would not be different in kind or significance from other drivers of customer demand that we have responded to in the past and are continually facing.

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Your response to prior comment 6 states that you have not identified any material litigation risks related to climate change. Please provide us with additional support for this statement and tell us how you considered providing disclosure addressing the risks associated with the possibility of climate or environmental-related litigation and its potential impact.

We assess the risk of material litigation related to climate change by reviewing threatened or asserted claims against us and monitoring trends and developments in litigation and regulation. Based on this process, we have not identified material litigation risks related to climate change.

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We note from your response to prior comment 7 that you do not purchase or sell carbon offsets that are material to your business, financial condition or results of operations. Provide us with additional detail regarding purchases or sales of carbon credits or offsets, including quantitative information.

Certain of our business units purchase a nominal amount of carbon offset credits from time to time; these transactions in 2020 were less than $1 million. Gulfstream makes carbon offset credits available to customers solely by facilitating sales between our customers and an independent third party. We do not sell carbon offset credits.

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We would welcome the opportunity to discuss these comments with you further. In the meantime, please do not hesitate to contact me with any questions about these matters. Read in the reply ↗

We note the description of your risk-management program provided with your response to prior comment 3. Please tell us about the indirect consequences of climate-related regulation or business trends identified as part of your risk assessment, such as those noted in comment 3 in our letter dated September 21, 2021, and further explain how management determined that they are not material.

As we stated in our previous responses, General Dynamics employs processes designed to identify and manage risks to our business, whether caused by or related to climate or non-climate factors. Risk management is integral to our business planning process and, therefore, would include the identification of risks that could lead to significant potential decreased demand for our existing products and services, increased demand for competing products and services, increased competition to develop innovative products, and reputational risks associated with ongoing and planned operations.

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Business planning and risk management are not only central to the management of our business, they are also essential to our ability to comply with our reporting obligations as a public company by supporting our disclosure controls and procedures (“DC&P”).

Below we summarize in more detail our business planning process and risk management program, and our DC&P.

Business Planning and

Risk Management

Annually, our management team develops business plans that include strategic, operational and financial plans and goals. As part of this process, we focus on identifying, monitoring, planning for, responding to, and internally communicating short-term and longer-term trends, risks and opportunities—including those that arise from exogenous events and conditions such as climate-related regulation, expenses and liabilities; changes in demand patterns and competition driven by

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Tel: 703-876-3000 jaiken@generaldynamics.com climate change; and climate-related reputational risks (broadly referred to below as “climate trends and risks”)—potentially affecting our operations and performance with reference to such factors as:

• product demand and pricing, raw material and component availability and pricing, sub-contractor costs and performance, supply chain, labor cost and labor relations, and capital assets.

Management is evaluated and compensated largely based upon our performance against our business plans, thereby providing accountability for these risk-identification and mitigation responsibilities.

Any potentially material risks, opportunities, trends or uncertainties, including climate trends and risks, can significantly impact our business plans relating to such matters as capital expenditures; product strategy and research and development; planning and budgeting for contingency plans and other mitigation strategies; and decisions to invest in risk-shifting vehicles such as insurance. Therefore, to the extent that climate trends and risks were potentially material to our business, our business plans would necessarily address the impact of such trends and risks on such matters as product portfolio and pricing, research and development, and capital expenditures.

General Dynamics recognizes that even the best business planning process cannot identify, in advance, all trends and factors that may ultimately significantly affect the operational and financial success of our business. In addition to the annual business planning process, our businesses regularly report to and communicate with senior management regarding their operations and performance, through ongoing conversations with senior management, regular internal reporting and business reviews. In the potential instance where a risk that was not identified and communicated to senior management through our risk mitigation and business planning process begins to impact financial or operational performance, we would expect that our regular reports and reviews would begin to reveal this impact. For instance, as noted in response to comment 3 below, risks relating to severe weather may be identified as a part of our risk management and business planning process, but in any case, would tend to manifest early on as we monitor financial indicators such as increased losses due to storm damages that would become apparent to our management. Similarly, regulatory risks that become more heightened would be expected to reveal themselves in increased compliance costs or legal expenses, regulatory actions or increased litigation. Changes in demand patterns as an indirect consequence of climate change would start to result in deteriorating orders and sales, and changes in competition would start to result in lower win rates on contract bids. Any of these developments, if significant, would prompt our management to focus on the need to identify underlying causes in order to ensure that they are appropriately taken into consideration in our business planning and risk management program.

DC&P

General Dynamics has established DC&P designed to ensure that information required to be disclosed in reports that we file with the SEC, including matters required to be disclosed pursuant to Items 105 (Risk Factors) and Item 303 (Management’s Discussion and

Analysis of Financial Condition and Results of Operations) of Regulation S-K, in our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and other relevant filings, is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms.

Among other things, our DC&P are designed to ensure that potentially material risks, opportunities, known uncertainties, trends and similar information—including with respect to climate trends and risks—are accumulated and communicated to our senior management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

Specifically, our DC&P process includes:

regular inquiries to, and required data reporting from, operational and functional staff throughout the organization;

regular and ad hoc meetings and other communications between the functional staff that support Disclosure

Committee members and functional staff that support operations (such as legal, accounting, financial reporting, and financial planning and analysis);

regular and ad hoc communications between Disclosure Committee personnel, senior management and operational leaders to discuss potentially material risks, developments, and trends and their potential impact on our business; and review of our SEC disclosures, including business, MD&A, legal and regulatory, and risk factor disclosures by our senior management team, who are also part of the business planning and risk management processes.

As noted above, the internal communication of information that is vital to our risk management and business planning process also ensures that significant information with respect to climate risks and trends is known by or brought to the attention of General Dynamics personnel with responsibility for preparing our SEC disclosures through our DC&P. As with all risks escalated through these operational and other processes, management assesses the materiality of climate trends and risks in order to ensure that we comply with our reporting obligations as a public company.

Through the processes described above, we have not identified material indirect consequences of climate-related regulation or business trends, as stated in our October 5, 2021, letter. That said, in light of the expected continuing development of climate-related regulation, we included the following disclosure in our annual report on Form

10-K for the year ended December 31, 2021, under the heading “Risk Factors.”

Increased regulation related to global climate change could negatively affect our business. Increased public awareness and concern regarding global climate change may result in state, federal or international requirements to reduce or mitigate global warming, such as the imposition of carbon pricing mechanisms or stricter limits on greenhouse gas emissions. If environmental or climate-change laws or regulations are adopted or changed that impose significant new costs, operational restrictions or compliance requirements upon our business or our products, they could increase our capital expenditures, reduce our margins and adversely affect our financial position.

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Your response to prior comment 5 states you have not incurred any material costs arising from weather-related damages to property or operations in recent years. Please provide us with quantitative information to support this statement.

We believe our insurance claim data provides an appropriate quantitative measure of weather-related damages. Therefore, in order to respond to this comment, we reviewed a trailing 10-year history of weather-related loss events that were reported to our risk management group, which maintains data regarding claims under applicable insurance policies. Eight such events were reported during this period, of which two events resulted in claims under our policies. Those two losses were valued at $1.1 million (2012) and $10.3 million (2018).

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In the other six events, we did not measure the exact amount of loss because the loss value was determined to be below our deductible (generally $1 million, and $5 million in one instance). Given our 2021 revenues of $38.5 billion, operating costs and expenses of $34.3 billion, net earnings of $3.3 billion, and period-end total assets of

$50.1 billion and shareholders’ equity of $17.6 billion, even if aggregated we do not consider these amounts quantitatively material to General Dynamics’ financial position or results of operations.

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We note from your response to comment 5 that business units potentially affected by severe weather events address and mitigate the risk through your corporate risk management process. As certain sites appear to be vulnerable to severe weather events, explain further how you considered providing disclosure of material risks of, or consequences from, such events.

Please see our response to comment 1 above, in which we provide an overview of the process by which we identify significant risks and how the identification of these risks is reviewed and evaluated to inform the disclosure decisions that we make in accordance with our DC&P. Although certain of our sites are likely more vulnerable than others to severe weather events based on geographic location, as illustrated by our response to comment 2 above, we have not to date experienced material losses as a result of these vulnerabilities and currently we do not forecast such material losses.

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an example, as noted in our response to prior comment 5, our Gulfstream business has contemplated severe weather events for many years at its

Savannah, GA, site. After considering various mitigation strategies, Gulfstream has put specific procedures and business continuity plans in place to mitigate the risks to our staff, facilities and operations. Gulfstream has a well-rehearsed hurricane planning and response plan in Savannah that it implements when a specific storm’s path is expected to come through or near the Savannah area. Over the 10-year period since 2011, Gulfstream has implemented its hurricane response plan six times. As evidenced by our response to comment 2, Gulfstream has not incurred material property damage from such events.

If in the future we determine through our business planning, risk management and DC&P processes that the risks presented by severe weather events cannot be adequately mitigated or that the costs of mitigation would be significant, we would expect to take these determinations into account in preparing our disclosures.

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We would welcome the opportunity to discuss these comments with you further. In the meantime, please do not hesitate to contact me with any questions about these matters.

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