WASHINGTON, Feb 4 (Reuters) - Raytheon, a unit of RTX, has reached a seven-year agreement with the Pentagon to boost production of Tomahawks, air-to-air missiles and ballistic missile interceptors, the company
said on Wednesday.
The Pentagon's push to expand production comes as Washington races to rebuild depleted weapons stockpiles.
The agreements follow similar deals brokered between the administration of President Donald Trump and the biggest U.S. defense contractors that lock in government demand over multiple years, giving the companies confidence to invest billions of dollars in new facilities and equipment.
Deals signed by Lockheed Martin last month indicate a shift in defense acquisition strategy aimed at rebuilding America's industrial capacity to sustain high-intensity warfare.
The Raytheon deals aim to increase annual production of Tomahawk cruise missiles from the current rate of about 60 per year for the U.S. to eventually 1,000 units annually. The sea-launched Tomahawk, a mainstay of the Navy's surface fleet, provides long-range precision strike capability against land targets from ships and submarines.
The land-based Tomahawk variant, a newer addition to the arsenal, gives ground units similar long-range strike options.
Production of AMRAAM air-to-air missiles will rise to at least 1,900, RTX said in a statement. The AMRAAM, primarily used by the Air Force and Navy, serves as the military's primary beyond-visual-range air-to-air combat missile.
Production rates of SM-3 Block IB and SM-3 Block IIA ballistic missile interceptors will also rise, with many munitions growing two to four times current output, the company said. The SM-3 Block IB and Block IIA interceptors, both Navy systems, are designed to destroy short- to intermediate-range ballistic missiles in space.
SM-6 interceptor production would grow to over 500, from about 125. SM-6 provides the Navy with air defense, anti-ship warfare and ballistic missile defense capabilities in one weapon.
The agreements incorporate a "collaborative funding approach" designed to preserve upfront free cash flow while allowing RTX to invest in long-term production capacity, the company said.
The deal comes as Trump attempts to shake up the defense industry and compel it to deliver weapons more quickly. He signed an order in January linking defense firms' dividends, share buybacks and executive pay to weapons delivery schedules, introducing uncertainty around capital returns.
"These agreements redefine how government and industry can partner to speed the delivery of critical technologies," RTX CEO Chris Calio said in a statement. RTX did not provide a dollar value for the deals.
Production will be at Raytheon facilities in Tucson, Arizona, Huntsville, Alabama, and Andover, Massachusetts.
The framework deals follow similar agreements by Lockheed Martin this month to quadruple THAAD interceptor production to 400 units annually and boost Patriot PAC-3 output to 2,000 per year under seven-year contracts.
(Reporting by Mike Stone in Washington; Editing by Raju Gopalakrishnan)
