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Raytheon Company () is a major United States military contractor based in Waltham, Massachusetts. The company has 80,000 employees worldwide, and annual revenues of approximately *] 22 billion. More than 90 percent of Raytheon's revenues are obtained from defense contracts, and as of 2005 it is the fifth largest military contractor in the world.

History

Two former college roommates Laurence K. Marshall and Vannevar Bush, along with scientist Charles G. Smith, founded the American Appliance Company in Cambridge, Massachusetts in 1922. The company's first product was a gaseous rectifier, called the Raytheon ("light of the gods") and used for radio-receiver power supplies that plugged into the power grid in place of large batteries. The company changed its name to Raytheon in 1925.

In World War II Raytheon manufactured magnetron tubes for use in radar sets, and then complete radar systems. (In 1945 Raytheon's Percy Spencer invented the microwave oven by discovering that the magnetron could also cook food.) In 1948 Raytheon began to manufacture guided missiles. During the post-war years Raytheon also made radio and television transmitters and related equipment for the commercial market in the U.S., and got into the educational publishing business with the acquisition of D.C. Heath.

Raytheon acquired Beech Aircraft in 1980; in 1993 the company also purchased British Aerospace's business jet product line. These two entities were merged in 1994 to become Raytheon Aircraft Company.

In the mid-1990's, Raytheon purchased the defense businesses of E-Systems and Texas Instruments. In 1997 Raytheon also acquired the defense business of Hughes Electronics from General Motors, which included a number of product lines previously purchased by Hughes including the former General Dynamics missile business, the defense portion of Delco Electronics, and Magnavox Electronic Systems. These acquisitions/mergers added many important military products to Raytheon's portfolio.

In the 1990s Raytheon tried to build a Personal rapid transit system called PRT2000 but didn't win any contracts. The system sits idle at their Marlboro, Massachusetts facility.

Businesses

Raytheon is currently composed of seven major businesses:

In addition to its US domestic facilities, Raytheon currently has offices in countries worldwide, including Australia, Belgium, Brazil, Canada, Chile, China, Czech Republic, Egypt, France, Germany, Greece, India, Italy, Japan, Kuwait, Malaysia, Marshall Islands, Norway, Republic of Korea, Singapore, Saudi Arabia, Spain, Sweden, Taiwan, Thailand, Turkey, United Arab Emirates, and the United Kingdom.

Products

Missiles still form a large part of Raytheon's business, including:

Additionally, Raytheon is a leading developer and manufacturer of radars (including AESAs), electro-optical sensors, and other advanced electronics systems for airborne, naval and ground based military applications. Examples include:

Raytheon, oftentimes in conjunction with Boeing, Lockheed Martin or Northrop Grumman, is also heavily involved in the satellite sensor business. Much of its Space and Airborne Systems division in El Segundo, CA is devoted to this, a business it inherited from Hughes. Examples of programs include:

Additionally, the El Segundo site is the company center of excellence for the development and production of laser products.

In the framework of Ground-Based Midcourse Defense, Raytheon develops a Ground-Based Interceptor (GBI) which includes a booster missile and a kinetic Exoatmospheric Kill Vehicle (EKV). The company also makes several software radio and digital communication systems for military applications such as Cooperative Engagement Capability (CEC), is participating in Navy-Marine Corps Intranet (NMCI), ECHELON and the Joint Tactical Terminal (JTT) programs.

Raytheon also manufactures semiconductors for the electronics industry. In the late 20th century it produced a wide range of integrated circuits and other components, but as of 2003 its semiconductor business specializes in gallium arsenide (GaAs) components for radio communications. It is also making efforts to develop gallium nitride (GaN) components for next-generation radars and radios.

Another principal commercial product line is corporate jet aircraft, which are sold under the Beechcraft and Hawker brand names. Raytheon currently manufactures just one military aircraft, the T-6 Texan II.

Corporate governance

William H. Swanson is the Chairman and CEO. Other members of the board of directors of Raytheon are: Barbara Barrett, Vern Clark, Ferdinand Colloredo-Mansfeld, John Deutch, Thomas Everhart, Frederic Poses, Warren Rudman, Michael Ruettgers, Ronald Skates, William Spivey, and Linda Stuntz.

Controversies and litigation

Government influence

Since nearly all of Raytheon's revenues are obtained from defense contracts, there is necessarily a tight cooperation between Raytheon and the U.S. Department of Defense. This, along with heavy lobbying, has led to perennial charges of influence peddling. Raytheon contributed nearly a million dollars to various defense-related political campaigns in 2004, spending much more than that on lobbying expenses. And there are many tight ties between the company and all levels of government. Richard Armitage, former United States Deputy Secretary of State, is linked to the company by consultancy work. John M. Deutch, former U.S. Director of Central Intelligence, sits on the board of directors, along with Warren Rudman, a former Senator.

Illegally obtaining classified documents

In March 1990, Raytheon pleaded guilty to one felony count of illegally obtaining classified Air Force budget and planning documents. U.S. District Judge Albert V. Bryan, Jr. imposed a dollar|$" target="_blank" >*10,000 criminal fine for one felony count of "conveyance without authority" and $900,000 in civil penalties and damages. The documents allegedly gave Raytheon an unfair advantage against its competitors in bidding for weapons contracts. Although the plea only involved 1983 Air Force documents, United States Attorney Henry Hudson said Raytheon also illegally obtained a wide range of secret Pentagon documents.

Disputed claims about the Patriot missile

During the 1991 Gulf War, Raytheon received widespread publicity in the United States in connection with its manufacture of the Patriot Missile (MIM-104 Patriot). The Patriot Missile is an anti-aircraft missile which was upgraded to have some capability against ballistic missiles. The Patriot had allegedly intercepted Scud Missiles launched by Iraq in its defense against the U.S. led invasion. When President George H. W. Bush traveled to Raytheon's Patriot manufacturing plant in Andover, Massachusetts during the Gulf War, he declared, the ""Patriot is 41 for 42: 42 Scuds engaged, 41 intercepted!" After the Gulf War had concluded, the staff of the House Government Operations Subcommittee on Legislation and National Security reported, "The Patriot missile system was not the spectacular success in the Persian Gulf War that the American public was led to believe. There is little evidence to prove that the Patriot hit more than a few Scud missiles launched by Iraq during the Gulf War, and there are some doubts about even these engagements. The public and the Congress were misled by definitive statements of success issued by administration and Raytheon representatives during and after the war." An upgraded version of the Patriot, called PAC-3 was the first version designed from the outset to engage ballistic missiles, and was deployed in 2002. The PAC-3 had a 100% success rate intercepting tactical ballistic missiles in Operation Iraqi Freedom, although it was involved in at least two friendly fire incidents.

AGES Lawsuit

In 1996 a corporation called AGES Group filed suit against Raytheon in federal court in Alabama over a $450 million contract to service C-12 Huron and U-21 military aircraft. The Boston Herald reported that AGES alleged that the security firm Wackenhut Corporation, hired by Raytheon, used video and audio surveillance to spy on a consulting firm hired by AGES to help it prepare its bid. AGES also alleged that stolen confidential pricing documents were turned over to Raytheon. Both Raytheon and AGES had been vying for the contract, which Raytheon had held for decades but which AGES won in 1996. On May 12, 1999, Reuters reported that Raytheon would pay $3 million to AGES Group and purchase $13 million worth of AGES aircraft parts to settle AGES lawsuit. The settlement was exceptional in that the parties agreed that judgment would be entered against Raytheon, legally establishing the validity of AGES' allegations.

Contract Disputes

Raytheon frequently has been involved in contract disputes with the United States Government. In October of 1994, Raytheon paid $4 million to settle a U.S. government claim that it inflated a defense contract for antimissile radar. The PAVE PAWS system was designed to detect incoming submarine-launched ballistic missiles. PAVE PAWS stands for Precision Acquisition Vehicle Entry Phased Array Warning System. The government claimed in a federal lawsuit that Raytheon inflated a contract to upgrade two of four PAVE PAWS sites by proposing to hire higher-skilled employees than were necessary for the job. Just one year earlier, on October 14, 1993, Raytheon paid $3.7 million to settle allegations that it misled the U.S. Defense Department by overstating the labor costs involved in manufacturing Patriot missiles. "The recovery of this money is yet another warning to contractors that the Truth in Negotiations Act's information disclosure requirements will be strictly and sternly enforced," Frank Hunger, assistant attorney general, said in a statement.

Brazilian (SIVAM) Controversy

Allegations of bribery were made against Raytheon in 1995 in connection with its efforts to win a 1.4 billion dollar radar contract from Brazil for the SIVAM project. * SIVAM, the acronym for "System for Vigilance over the Amazon," is a complex radar surveillance system for use monitoring the Amazon rainforest, allegedly to curb the trafficking of narcotics and to curb illegal logging or burning of the forest. Brazilian police wiretapped a telephone conversation between Gomes dos Santos, a special advisor to the Brazilian President Fernando Henrique Cardoso, and Raytheon's operative in Brazil, Jose Afonso Assumpcão. According to transcripts published in the Brazilian Weekly Isto É, when Assumpcão told Gomes dos Santos that Brazilian Senator Gilberto Miranda might block the Raytheon contract, Gomes dos Santos responded, "Damn, did you already pay this guy?" Gomes dos Santos and Brazil's aviation minister resigned because of allegations that this conversation suggested that bribes were paid. Nonetheless, Raytheon ultimately was awarded the contract after lobbying by the administration of U.S. President Bill Clinton.

Securities Litigation

In October of 1999, Raytheon was the subject of a number of securities class action lawsuits alleging it had issued a series of materially false and misleading statements including overstating the company's 1997 and 1998 revenues, concealing cost overruns and inflating its financial results. The suits were brought in response to a massive drop in value of Raytheon's common stock as traded on the New York Stock Exchange. On Tuesday, October 12, 1999, Raytheon shares were trading at about 45% below the level at which they had been traded on October 11, 1999. The plunge in stock prices was triggered by a Wall Street Journal report that Raytheon was over cost or behind schedule on more than a dozen fixed-price defense contracts. This crash represented a loss of about $8 billion in market value in a single day. On May 13, 2004 Raytheon reported that it had reached a preliminary agreement to pay $410 million in cash and securities to settle a class-action lawsuit alleging it misled investors by not disclosing difficulties on various Pentagon and construction projects five years before.

CEO Plagiarism

On April 24, 2006 in a statement released by Raytheon, CEO Swanson admitted to plagiarism in claiming authorship for his booklet, "Swanson's Unwritten Rules of Management," after being exposed by The New York Times. On May 2, 2006, Raytheon withdrew distribution of the book. The following day, the company's board of directors announced that "In response to this matter, the Board has decided not to raise Mr. Swanson's salary above its 2005 level, and will reduce the amount of restricted stock for which he is eligible in the coming year by 20 percent."

Community outreach

Raytheon contributes to the community in various ways.

References

See also

External links

1922 establishments | Companies based in Massachusetts | Defense companies of the United States | Fortune 1000 | Raytheon

Raytheon | Raytheon | レイセオン

 

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