Raytheon Technologies

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Raytheon Technologies Corporation
Public
Traded as
IndustryAerospace, defense, electronics, information security
PredecessorUnited Technologies
Raytheon Company
FoundedApril 3, 2020; 4 months ago (2020-04-03)
Headquarters,
U.S.
Area served
Worldwide
Key people
Thomas A. Kennedy
(Executive Chairman)
Gregory J. Hayes
(CEO)
RevenueIncreaseUS$97.75 billion (2020)
Number of employees
195,000 (2020)
SubsidiariesCollins Aerospace
Pratt & Whitney
Raytheon Intelligence & Space
Raytheon Missiles & Defense
Websitertx.com
Footnotes / references
[1][2]

Raytheon Technologies Corporation is an American multinational conglomerate headquartered in Waltham, Massachusetts, United States. The company is one of the largest aerospace and defense manufacturers in the world by revenue and market capitalization. It researches, develops, and manufactures advanced technology products in the aerospace and defense industry, including aircraft engines, avionics, aerostructures, cybersecurity, missiles, air defense systems, and drones. The company is also a large military contractor, getting a significant portion of its revenue from the U.S. government.[3][4]

The company is the result of the merger of equals between the aerospace subsidiaries of United Technologies Corporation (UTC) and the Raytheon Company, which was completed on April 3, 2020. Before the merger, UTC spun-off its non-aerospace subsidiaries Otis Elevator Company and Carrier Corporation. UTC is the nominal survivor of the merger but it changed its name to Raytheon Technologies and relocated its headquarters to Waltham.[2][5] Former United Technologies CEO and chairman Gregory J. Hayes is the CEO of the combined company,[6] and former Raytheon CEO and chairman Thomas A. Kennedy is the Executive Chairman.[7]

The company has four subsidiaries: Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space and Raytheon Missiles & Defense.[8]

History[edit]

Raytheon Company[edit]

The Raytheon Company was founded in 1922 in Cambridge, Massachusetts by Laurence K. Marshall, Vannevar Bush, and Charles G. Smith as the American Appliance Company.[9] Its focus, which was originally on new refrigeration technology, soon shifted to electronics. The company's first product was a gaseous (helium) rectifier that was based on Charles Smith's earlier astronomical research of the star Zeta Puppis.[10] The electron tube was christened with the name Raytheon ("light of/from the gods"[11]) and was used in a battery eliminator, a type of radio-receiver power supply that plugged into the power grid in place of large batteries. This made it possible to convert household alternating current to direct current for radios and thus eliminate the need for expensive, short-lived batteries.[citation needed]

In 1925, the company changed its name to Raytheon Manufacturing Company and began marketing its rectifier, under the Raytheon brand name, with commercial success. In 1928 Raytheon merged with Q.R.S. Company, an American manufacturer of electron tubes and switches, to form the successor of the same name, Raytheon Manufacturing Company.[citation needed] By the 1930s, it had already grown to become one of the world's largest vacuum tube manufacturing companies.[citation needed] In 1933 it diversified by acquiring Acme-Delta Company, a producer of transformers, power equipment, and electronic auto parts.[citation needed]

During World War II, Raytheon mass manufactured magnetron tubes for use in microwave radar sets and then complete radar systems. At war's end in 1945 the company was responsible for about 80 percent of all magnetrons manufactured. During the war Raytheon also pioneered the production of shipboard radar systems, particularly for submarine detection. Raytheon ranked 71st among United States corporations in the value of World War II military production contracts.[12] Raytheon's research on the magnetron tube revealed the potential of microwaves to cook food. In 1945, Raytheon's Percy Spencer invented the microwave oven by discovering that the magnetron could rapidly heat food. In 1947, the company demonstrated the Radarange microwave oven for commercial use.[citation needed]

After the war, Raytheon developed the first guidance system for a missile that could intercept a flying target. In 1948, Raytheon began to manufacture guided missiles, including the SAM-N-2 Lark, the air-to-air AIM-7 Sparrow, and the ground-to-air MIM-23 Hawk missiles. In 1959, Raytheon acquired the marine electronics company Apelco Applied Electronics, which significantly increased its strength in commercial marine navigation and radio gear, and changed its name to Raytheon Company.[citation needed]

During the post-war years, Raytheon also made generally low- to medium-powered radio and television transmitters and related equipment for the commercial market. In the 1950s, Raytheon began manufacturing transistors, including the CK722, priced and marketed to hobbyists. In 1965, it acquired Amana Refrigeration, Inc., a manufacturer of refrigerators and air conditioners. Using the Amana brand name and its distribution channels, Raytheon began selling the first countertop household microwave oven in 1967 and became a dominant manufacturer in the microwave oven business.

In 1991, during the Persian Gulf War, Raytheon's Patriot missile received great international exposure, resulting in a substantial increase in sales for the company outside the United States. In an effort to establish leadership in the defense electronics business, Raytheon purchased in quick succession Dallas-based E-Systems (1995); Chrysler Corporation's defense electronics and aircraft-modification businesses, which had previously acquired companies such as Electrospace systems (1996) (portions of these businesses were later sold to L-3 Communications), and the defense unit of Texas Instruments, Defense Systems & Electronics Group (1997). Also in 1997, Raytheon acquired the aerospace and defense business of Hughes Aircraft Company from Hughes Electronics Corporation, a subsidiary of General Motors, which included a number of product lines previously purchased by Hughes Electronics, including the former General Dynamics missile business (Pomona facility), the defense portion of Delco Electronics (Delco Systems Operations), and Magnavox Electronic Systems.[13] Raytheon also divested itself of several nondefense businesses in the 1990s, including Amana Refrigeration and Seismograph Service Ltd (sold to Schlumberger-Geco-Prakla).

In November 2007, Raytheon purchased robotics company Sarcos,[14] and in October 2009, Raytheon acquired BBN Technologies.[15][16] In December 2010, Applied Signal Technology agreed to be acquired by Raytheon for $490 million.[17]

In October 2014, Raytheon beat rivals Lockheed Martin and Northrop Grumman for a contract to build 3DELRR, a next-generation long-range radar system, for the US Air Force worth an estimated $1 billion.[18] The contract award was immediately protested by Raytheon's competitors, Lockheed Martin and Northrop Grumman. After re-evaluating the bids following the protests,[19] the US Air Force decided to delay awarding the 3DELRR EMD contract until 2017 and was to issue an amended solicitation at the end of July 2016.[20] In 2017 the Air Force again awarded the contract to Raytheon.[21]

In May 2015, Raytheon acquired cybersecurity firm Websense, Inc. from Vista Equity Partners for $1.9 billion[22] and combined it with RCP, formerly part of its IIS segment to form Raytheon|Websense.[23] In October 2015, Raytheon|Websense acquired Foreground Security, a provider of security operations centers, managed security service solutions[buzzword] and cybersecurity professional services,[24] for $62 million.[25] In January 2016, Raytheon|Websense acquired the firewall provider Stonesoft from Intel Security for an undisclosed amount and renamed itself to Forcepoint.[26]

In July 2016, Poland's Defence Minister Antoni Macierewicz planned to sign a letter of intent with Raytheon for a $5.6 billion deal to upgrade its Patriot missile-defence shield,[27][28] and in 2017, Saudi Arabia signed business deals worth billions of dollars with multiple American companies, including Raytheon.[29][30]

In February 2020, Raytheon completed the first radar antenna array for the US Army's new missile defense radar, known as the Lower Tier Air and Missile Defense Sensor (LTAMDS), to replace the service's Patriot air and missile defense system sensor.[31]

United Technologies Corporation[edit]

In 1929, William Boeing of the Boeing firms teamed up with Frederick Rentschler of Pratt & Whitney to form the United Aircraft and Transport Corporation, a large, vertically-integrated, amalgamated firm, uniting business interests in all aspects of aviation—a combination of aircraft engine and airframe manufacturing and airline business, to serve all aviation markets, both civil aviation (cargo, passenger, private, air mail) and military aviation.[32] After the Air Mail scandal of 1934, the U.S. government concluded that such large holding companies as United Aircraft and Transport were anti-competitive, and new antitrust laws were passed forbidding airframe or engine manufacturers from having interests in airlines.[33]

United Aircraft Corporation was formed in 1934 from the portions of United Aircraft and Transport east of the Mississippi River (Pratt & Whitney, Sikorsky, Vought, and Hamilton Standard Propeller Company), headquartered in Hartford with Frederick Rentschler, founder of Pratt & Whitney, as president.[33][34]

United Aircraft became a component of the Dow Jones Industrial Average on March 4, 1939, when United Aircraft and AT&T were added to replace Nash Motors and International Business Machines. United Aircraft, subsequently known as United Technologies and Raytheon Technologies, has remained a component of the Dow Jones Industrial Average since that time.

During World War II, United Aircraft ranked sixth among United States corporations in the value of wartime production contracts.[35] At the close of the war, jet engines and helicopters were both big new things whose coming growth many companies hoped to get in on. United Aircraft entered both industries, via Pratt & Whitney and Sikorsky, respectively.[33]

In the 1950s, United Aircraft began developing jet engines, including the Pratt & Whitney J57, the most powerful jet engine on the market for some years.[33] In the 1960s, Pratt & Whitney produced the Pratt & Whitney JT9D for the Boeing 747.[33]

In 1974, Harry Gray left Litton Industries to become the CEO of United Aircraft.[33] He pursued a strategy of growth and diversification, changing the parent corporation's name to United Technologies Corporation (UTC) in 1975 to reflect the intent to diversify into numerous high tech fields beyond aerospace.[36] (The change became official on May 1, 1975.) The diversification was partially to balance civilian business against any overreliance on military business.[33] UTC became a mergers and acquisitions (M&A)–focused organization, with various forced takeovers of unwilling smaller corporations.[33] The next year (1976), UTC forcibly acquired Otis Elevator.[37] In 1979, Carrier Refrigeration was acquired;[38]

At one point the military portion of UTC's business, whose sensitivity to "excess profits" and boom/bust demand drove UTC to diversify away from it, actually carried the weight of losses incurred by the commercial M&A side of the business.[33] Although M&A activity was not new to United Aircraft, the M&A activity of the 1970s and 1980s was higher-stakes and arguably unfocused. Rather than aviation being the central theme of UTC businesses, high tech (of any type) was the new theme. Some Wall Street watchers questioned the true value of M&A at almost any price, seemingly for its own sake.[33]

In 1999, UTC acquired Sundstrand Corporation and merged it into UTC's Hamilton Standard unit to form Hamilton Sundstrand. In 2003, UTC entered the fire and security business by purchasing Chubb Security. In 2004, UTC acquired the Schweizer Aircraft Corporation which planned to operate as a wholly owned subsidiary under their Sikorsky Aircraft division.[39] In 2005, UTC further pursued its stake in the fire and security business by purchasing Kidde. Also in 2005, UTC acquired Boeing's Rocketdyne division, which was merged into the Pratt & Whitney business unit and renamed Pratt & Whitney Rocketdyne (later sold to Aerojet and merged into Aerojet Rocketdyne. In November 2008, UTC's Carrier Corporation acquired NORESCO, an energy service company.[40]

In 2010, UTC conducted its largest acquisition to date, General Electric's security equipment business for US$1.8 billion, a move to support UTC's Fire & Security unit.[41]

In September 2011, UTC acquired a $18.4 billion deal (including $1.9 billion in net debt assumed) for aircraft components maker Goodrich Corporation.[42] In July 2012, United Technologies acquired Goodrich and merged it with Hamilton Sundstrand, forming UTC Aerospace Systems.

In November 2018, UTC acquired Rockwell Collins for $23 billion ($30 billion including Rockwell Collins' net debt).[43][44] As part of the deal, Pratt and Whitney and the newly-formed Collins Aerospace remained under United Technologies, while Otis Elevator and UTC Climate, Controls & Security (doing business as Carrier) were spun off as two independent companies.[45] The spin off was completed in March 2020.[46]

Raytheon Technologies[edit]

In June 2019, United Technologies announced the intention to merge with the Raytheon Company to form Raytheon Technologies Corporation. The combined company, valued at more than $100 billion after planned spinoffs, would be the world's second-largest aerospace-and-defense company by sales behind Boeing.[47] Although UTC will be the nominal survivor, the merged company will be headquartered in Waltham, Massachusetts, where Raytheon is based, rather than UTC's former base in Farmington, Connecticut.[48] The merger was completed in April 2020, forming Raytheon Technologies.[49]

On July 28th, the company announced cutting of over 8,000 jobs in its commercial aviation division due to travel slowdown induced by the global COVID-19 pandemic.[50]

Business units[edit]

References[edit]

  1. ^ "United Technologies Corporation 2019 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ^ a b "United Technologies and Raytheon Complete Merger of Equals Transaction". www.rtx.com (Press release). Raytheon Technologies. April 3, 2020. Retrieved April 3, 2020.
  3. ^ Ehrenfreund, Max (December 5, 2016). "CEO: United Tech. considered federal contracts in decision to keep Indiana jobs in deal with Trump". The Washington Post. Retrieved January 2, 2016. I also know that about 10 percent of our revenue comes from the U.S. government," [United Technologies chief executive Greg Hayes] said.
  4. ^ "CorpWatch : United Technologies". Archived from the original on July 4, 2015. Retrieved July 3, 2015.
  5. ^ Kilgore, Tomi (April 4, 2020). "Raytheon Technologies' stock, formerly United Technologies, starts trading in". MarketWatch.
  6. ^ Raytheon Technologies. "Gregory J. Hayes".
  7. ^ Raytheon Technologies. "Thomas A. Kennedy".
  8. ^ "Raytheon Technologies: Should You Buy the Dip Now?". Citybizlist. Retrieved May 18, 2020.
  9. ^ Raytheon Australia. History. Archived August 30, 2007, at the Wayback Machine Raytheon Marketing Material.
  10. ^ Otto J. Scott, The Creative Ordeal, (New York, Atheneum, 1974),16–32
  11. ^ Raytheon Company: The Early Days. Raytheon.com. September 30, 2007. Retrieved on February 4, 2012. Archived April 15, 2009, at the Wayback Machine
  12. ^ Peck, Merton J. & Scherer, Frederic M. The Weapons Acquisition Process: An Economic Analysis (1962) Harvard Business School p.619
  13. ^ Pavelec, S. Mike (2010). The military-industrial complex and American society. ABC-CLIO. ISBN 9781598841886.
  14. ^ Jump up ^ Staff (November 14, 2007). "Business Briefs". The Lowell Sun (MediaNews Group)
  15. ^ Raytheon Announces Agreement to Purchase BBN Technologies Archived May 11, 2012, at the Wayback Machine WALTHAM, Mass., September 1, 2009. PRNewswire.
  16. ^ Raytheon Completes Acquisition of BBN Technologies MCKINNEY, Texas, October 26, 2009. PRNewswire.
  17. ^ Hubler, David (December 20, 2010). "Raytheon buys Applied Signal Technology". Washington Technology. Retrieved August 21, 2019.
  18. ^ Raytheon wins deal for next-generation U.S. Air Force radar. Reuters, October 7, 2014
  19. ^ Mehta, Aaron (January 22, 2015). "US Air Force to Reevaluate 3DELRR Award". Retrieved August 7, 2017.
  20. ^ USAF delays awarding 3DELRR EMD contract until 2017. Janes, July 15, 2016
  21. ^ Mehta, Aaron (August 8, 2017). "Raytheon awarded 3DELRR radar contract for second time". DefenseNews. Retrieved August 20, 2019.
  22. ^ Jaisinghani, Sagarika (April 25, 2015). "Raytheon to buy cybersecurity firm Websense in $1.9 billion deal". Reuters. Retrieved October 30, 2018.
  23. ^ Bach, James (January 14, 2016). "Raytheon-Websense joint cyber venture changes name to Forcepoint". Washington Business Journal. Retrieved October 31, 2018.
  24. ^ "Raytheon broadens cyber capabilities with acquisition of Foreground Security". PR Newswire. October 5, 2015. Retrieved October 31, 2018.
  25. ^ "Raytheon Paid $62M for Foreground Security". TransactionView. Retrieved October 31, 2018.
  26. ^ Riley, Duncan (January 14, 2016). "Raytheon|Websense acquires Stonesoft from Intel Security, renames combined company Forcepoint". SiliconANGLE. Retrieved October 31, 2018.
  27. ^ "Rocketing around the world". The Economist. ISSN 0013-0613. Retrieved July 23, 2016.
  28. ^ "Poland moves towards multi-billion-euro Patriot missile deal". Retrieved July 23, 2016.
  29. ^ "Saudi Arabia agrees to buy $7 billion in precision munitions from U.S. firms: sources". Reuters. November 23, 2017.
  30. ^ "Raytheon Arm Wins $302M Deal to Boost Saudi Arabia's Defense". Nasdaq.com. December 13, 2017.
  31. ^ Judson, Jen (February 21, 2020). "Raytheon completes first antenna for US Army's new missile defense radar". Defense News. Retrieved February 21, 2020.
  32. ^ Sobel, Robert (1972). The Age of Giant Corporations: a Microeconomic History of American Business, 1914-1970. Westport, Conn., Greenwood Press: Greenwood Press. ISBN 978-0-8371-6404-5. OCLC 488208.
  33. ^ a b c d e f g h i j Fernandez, Ronald (1983), Excess Profits: The Rise of United Technologies, Boston: Addison-Wesley, ISBN 9780201104844.
  34. ^ Herman, Arthur. Freedom's Forge: How American Business Produced Victory in World War II, p. 6, Random House, New York, NY, 2012. ISBN 978-1-4000-6964-4.
  35. ^ Peck, Merton J. & Scherer, Frederic M. The Weapons Acquisition Process: An Economic Analysis (1962) Harvard Business School p.619
  36. ^ Fernandez 1983, p. 246.
  37. ^ Fernandez 1983, pp. 246–251.
  38. ^ Fernandez 1983, pp. 260–264.
  39. ^ Schweizer acquisition press release Archived April 10, 2008, at the Wayback Machine
  40. ^ "Carrier Acquires Noresco to Expand Energy Solutions Capabilities". Carrier Corporation. November 21, 2008. Archived from the original on December 30, 2013. Retrieved April 25, 2013.
  41. ^ a b Gershon, Eric (January 1, 2010). "UTC Boss Looks To Make His Mark". Hartford Courant. CLXXIV (1). Hartford, Connecticut: The Hartford Courant Company. pp. A1, A8 – via Newspapers.com. The main citation is for Page A1; Page A8 appears in this clipping.
  42. ^ "United Technologies to acquire Goodrich in USD 18.4 bn deal". September 23, 2011. Archived from the original on June 5, 2012. Retrieved September 25, 2011.
  43. ^ "United Technologies To Acquire Rockwell Collins For $30 Billion" (Press release). United Technologies. September 4, 2017.
  44. ^ Craver, Richard (November 27, 2018). "UTC completes $30B deal for Rockwell Collins, announces three-way split of company". Winston-Salem Journal.
  45. ^ Mattioli, Dana; Gryta, Thomas (November 26, 2018). "United Tech to Break Itself Into Three Companies". Retrieved June 10, 2019 – via www.wsj.com.
  46. ^ "United Technologies Board Of Directors Approves Separation Of Carrier And Otis And Declares Spin Off Distribution Of Carrier And Otis Shares". StreetInsider.com. Retrieved March 12, 2020.
  47. ^ Lombardo, Cara; Cameron, Doug (June 10, 2019). "United Technologies Strikes Deal to Merge With Raytheon". Wall Street Journal. ISSN 0099-9660. Retrieved June 10, 2019.
  48. ^ Singer, Stephen (June 9, 2019). "United Technologies says it's merging with defense contractor Raytheon and moving headquarters to Boston area from Connecticut". Hartford Courant. Retrieved June 10, 2019.
  49. ^ Kilgore, Tomi (April 4, 2020). "Raytheon Technologies' stock, formerly United Technologies, starts trading in". MarketWatch.
  50. ^ "Raytheon sheds 8,000 aerospace jobs amid collapse in air travel". The Seattle Times. July 28, 2020. Retrieved July 29, 2020.

External links[edit]