Raytheon Could Be the Bigger Winner in America's Big Military Buildup

January 29, 2018 Topic: Security Blog Brand: The Buzz Tags: RaytheonMilitaryTechnologyWorldTrumpRussiaChina

Raytheon Could Be the Bigger Winner in America's Big Military Buildup

Meaning selling lots of high-tech weapons to America--and around the world. 

The Pentagon’s new National Defense Strategy looks like a winner to defense giant Raytheon, which foresees a bright future in the years to come as defense spending grows. The rise of a new era of great power competition means that high-end weapons that Raytheon builds will be in high demand.

“Last week, Secretary of Defense [James] Mattis released a national defense strategy. The strategy is subtitled, sharpening the American militaries competitive edge summarizes his intent clearly,” Tom Kennedy, Raytheon’s chairman and chief executive officer told investors. “Secretary Mattis calls for urgent change, a significant scale to content with the high end threats that are directly characterized as essential challenge to U.S. prosperity and security.”

For Raytheon, not only does that mean increased domestic sales but also growing export sales—particularly for its missile defense products. “Investment priorities are clearly articulated as is the need for accelerating defense exports to improve interoperability between U.S. and allied forces,” Kennedy said. “Providing sophisticated capabilities to our customers is essential to the growth strategy Raytheon has been executing. Our current capabilities and investments are aligned with secretary Mattis’ modernization priorities and we look forward to helping the defense department execute its strategy at the speed of relevance as secretary Mattis says.”

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Meanwhile, from Raytheon’s perspective, it expects to see strong Congressional support for increased investment in major weapons programs. “For the U.S. defense budget, we continue to see strong congregational backing for missile defense, cyber and other areas where Raytheon has a leadership position,” Kennedy said. “And we remain optimistic that congress will pass a fiscal year '18 budget that provides our military the resources, technology and training necessary to protect United States and support our allies.”

Increased defense spending and a better business climate will also have a positive impact on the U.S. economy as companies like Raytheon embark on a hiring spree. “This strong growth environment creates the benefit of a strong jobs environment,” Kennedy said. “And in 2017, we added over 1,000 new jobs to our payroll. These are noble jobs, rewarding, good paying jobs that allow our employees to buy homes, raise families and save for retirement, all while serving a lager purpose of helping to make the world a safer place.”

Overall, Raytheon sees a bright future. “The demand signals we see in our key growth areas, combined with the implementation of tax reform making us more globally competitive, creates a positive environment for continued business and jobs growth, going forward,” Kennedy said.

Dave Majumdar is the defense editor for The National Interest. You can follow him on Twitter: @davemajumdar.