Raytheon's CEO Discusses the Defense Industry's Future
Defense companies are going through a transformation, Raytheon's Chairman and CEO says, and the ones that will thrive are companies that understand how to do business internationally, invest in the future and keep pace with customer expectations.
“Those companies that are prepared and go through this downturn in a way that leverages their international business are going to be much stronger when they come out of this,” said William H. Swanson.
In an interview, Swanson said his company is getting ready for the next five years by focusing on upgrades and investing in research and development.
It's also redoubling its outreach to global customers. In June the company showed its latest technology at the Paris Air Show, even as some competitors scaled back their presence.
“If international business is important to you and you don’t show up internationally, then you’re missing the boat,” Swanson said.
Raytheon does business in more than 80 countries around the world. About 26 percent of the company’s business comes from international customers, a higher percentage than at any other U.S. defense firm. And the company’s radars, missiles and other products are designed to work with equipment made by other international suppliers from around the globe.
Swanson has been with Raytheon 41 years and is now in his tenth year at the helm of the Waltham, Mass.-based defense contractor. Over the last decade he has refocused the company on its core government work, shed other operations and trimmed waste companywide. In April the company reorganized from six divisions to four to further increase efficiency.
Swanson has also focused the company on solving the most difficult engineering problems.
That includes ballistic missile defense, which has become increasingly important as countries acquire long-range missile technology. Raytheon’s sensors and “hit-to-kill” interceptors have become key parts of every system in the U.S. missile defense program. In fact, in 2008 the company’s Standard Missile-3 successfully intercepted and destroyed a non-functioning satellite.
“Raytheon has proven that we know how to hit a bullet with a bullet,” Swanson said. “And we can do that in a way that no one else has ever demonstrated in the world.”
A number of countries in the Asia-Pacific and Middle East have depended on Raytheon’s missile defense technology for decades, but Swanson still sees both regions as growth opportunities for the company.
Raytheon has also focused heavily on bringing new abilities to tried-and-true products, analysts say. The strategy has put state-of-the-art sensors and guidance technology into trustworthy platforms like Standard Missile or Maverick.
“The company hasn’t been interested in just doing the novel thing; it has really been very focused on step-by-step improvements that ensure that what goes into the field … is credible, capable and effective,” said Daniel Goure, vice president of the Lexington Institute, a Washington-based think tank.
Raytheon enjoys a great reputation internationally because of longstanding relationships and mutual trust, according to Swanson. “We take our customers’ concerns and figure out how we can help.”
Last Updated: 03/02/2015