RTX Corporation

• Date Founded: 1922
• Industry:Defense and Aerospace
• Corporate Headquarters: Arlington, Virginia
• Type: Public

Overview

RTX Company (formerly Raytheon Technologies Corporation based in Waltham, Massachusetts) is an Arlington, Virginia-based technology company that specializes in defense, aerospace, and security technology. The company serves primarily government customers, both domestic and international. It manufactures defense systems and defense electronics and is the largest global producer of guided missiles.

The company was founded under the name American Appliance Company in 1922. Its three founders were Laurence Marshall, a civil engineer; Charles G. Smith, a physicist; and Vannevar Bush, an electrical engineer. Initially an innovator in manufacturing radio tubes, the company gained prominence during World War II for its radar technology. After the end of the Cold War, American Appliance Company diversified through acquisitions into industries ranging from construction to home and commercial appliances. The company is notable for the invention of the microwave oven and its development for consumer use.

With annual revenues of over $68 billion, the company is consistently in the ranks of the top five military contractors globally. The company provides its public and private sector customers with electronics, mission systems integration, sensing, command, control, communications and intelligence systems, and cybersecurity. In 2020, Raytheon merged with United Technologies to greatly expand its technologies and services in the fields of aerospace and defense. The company was renamed Raytheon Technologies. In 2023, the company was renamed RTX corporation.

History

In 1922, Laurence Marshall, a civil engineer, and his college roommate Vannevar Bush, a Massachusetts Institute of Technology (MIT) electrical engineering professor (who later became dean of the MIT School of Engineering), met Charles G. Smith, a Harvard physicist. Together, they formed the American Appliance Company with the intent of marketing Smith’s innovations in commercial refrigeration technology. Within a short time, they shifted their research to radio tube rectifiers. Radio was becoming commonplace in homes and required the tube rectifier to convert electrical current from AC to DC. The tube was an immediate commercial success. In 1925, the company adopted its new name, Raytheon, from the Greek "light of the gods."

Pushed out of the radio tube market when RCA, then the largest radio manufacturer and patent holder, made proprietary changes to its design, requiring manufacturers to purchase only RCA-made tubes, Raytheon shifted its attention to industrial electronics and microwave communication.

At the onset of World War II, Raytheon was tapped by the US Defense Department (DOD) to work on top-secret research with the British on the magnetron. Developed by the British, the magnetron was a microwave radar system that could provide far better detection of enemy planes, submarines, and warships. Raytheon’s contribution was to vastly increase the speed of production and installation of the magnetron radar and also to pioneer shipboard radar for the US Navy. The company saw its sales grow from $3 million in 1940 to $168 million by the end of 1945.

Following the war, Raytheon acquired Belmont Electronics, which was a pioneer in the development of early television technology. It also merged with a client, Submarine Signal Company (known as Sub-Sig). This merger enabled Raytheon to concentrate on further advancement in radar while Sub-Sig focused on innovations in sonar technology. These combined capabilities led to Raytheon’s development of the first guided missile, the Lark. This innovation was followed soon thereafter by the Sparrow, which is an air-to-air missile, and the Hawk, a surface-to-air guided missile system.

By 1962, heavily reliant on government defense contracts, Raytheon sought to diversify its operations. Though it had sold its television and radio division to the Admiral Corporation in 1956, Raytheon continued research and development of its microwave technology for commercial applications. The 1965 acquisition of Amana Corporation led to the 1967 introduction of the first countertop microwave oven for home kitchen use. Also that year, the DOD awarded Raytheon a contract to build the Patriot, a new surface-to-air missile system, so named for its anticipated full-scale production in 1976, the nation’s bicentennial year.

Through the late 1960s and into the 1970s, the company made acquisitions in the construction industry, specifically the petroleum and electric plant builders E. B. Badger Co. and United Engineers and Constructors; and Iowa Manufacturing Company (later renamed Cedarapids, Inc.), a road building equipment manufacturer. Raytheon remained in the consumer electronics and appliance manufacturing business, adding Switchcraft Inc. (a manufacturer of connectivity products); Glenwood Range (cooking ranges); and McGraw-Edison’s laundry products and kitchen appliance business, which included the Speed Queen brand of commercial laundry equipment.

Raytheon acquired Beech Aircraft in 1980 and, in the 1990s, added British Aerospace’s Corporate Jets division. These two companies were combined to form Raytheon Aircraft Company, a manufacturer of general aviation aircraft and corporate jets.

In the early 1990s, the Patriot Missile system became Raytheon’s most important product, both domestically and in non-US military sales. Raytheon sold most of its non-military assets through the 1990s and began acquiring a group of defense and strategic electronics companies with expertise in surveillance. Most notable among these were Dallas-based E-Systems Inc., Texas Instruments’ Defense Systems & Electronics Group, and the aerospace and defense business of Hughes Aircraft. However, these acquisitions also saddled Raytheon with significant debt, which contributed to the decision to sell off other businesses. Around the turn of the millennium, financial and management issues cut into the company's earnings projections and led to restructuring and layoffs. Still, Raytheon would enter the twenty-first century in the top ranks of global defense contractors and as a world leader in defense electronics, communications, surveillance, and cybersecurity.

In 2003, Raytheon moved its headquarters from Lexington, Massachusetts, to Waltham, Massachusetts, where it had been located from 1941 to 1961. In 2007, the company sold its aircraft subsidiary operations, which became Hawker Beechcraft under their new ownership. Raytheon subsequently aggressively added cybersecurity to its roster of services, making over a dozen acquisitions within the industry between 2007 and 2015. These included the notable acquisition in April 2015 of cybersecurity firm Websense Inc. for an estimated $1.9 billion. The company continued to win important global defense contracts, such as a $302 million missile deal with Saudi Arabia announced in late 2017.

In April 2020, Raytheon completed a merger with United Technologies Corporation, after which the company's name changed to Raytheon Technologies. The newly formed company, whose headquarters remained in Waltham, Massachusetts, comprised four main businesses: Collins Aerospace, Pratt & Whitney, Raytheon Intelligence and Space, and Raytheon Missiles and Defense. Raytheon Technologies thus became one of the world's largest aerospace and defense systems providers. One of the company's most highly publicized projects was Collins Aerospace's creation of a new spacesuit to be worn by astronauts on the planned lunar mission by the National Aeronautics and Space Administration (NASA) in 2024. However, Collins Aerospace exited the contract and ceased production of the suits before the mission launched. During this time, Collins also began working on a contactless system for air travel, made even more urgent by the COVID-19 pandemic. Employees at Raytheon Intelligence & Space worked on projects connected to threats from climate change, such as improved measurements in weather-observing systems intended to better predict severe weather.

In July 2023, the company rebranded as RTX Corporation, merging the Raytheon Intelligence and Space and Raytheon Missiles and Defense segments created in the 2020 merger. In October 2023, RTX sold its cybersecurity and intelligence unit to an undisclosed buyer for $1.3 billion. RTX expressed the desire to compete for Space Development Agency projects in the military satellite market. However, the company faced multiple criminal cases in 2024, with fines reaching nearly $1 billion. Their actions included defrauding the US Department of Defense by overcharging for their Patriot missile systems by over $111 million, bribing Qatari military officials to gain contracts in the Middle East, and covertly exporting defense technology to China, Iran, Lebanon, and Russia without proper government notification. The company issued a statement stating its intention to improve its compliance programs.

Impact

Despite its prominence in defense innovation and its important history in consumer appliances, Raytheon maintains a low corporate profile and is little recognized by the public. Raytheon played a role in many of the electrical innovations that shaped the lives of individuals and the course of history for nations throughout the twentieth century. The company’s early work in radio tubes helped usher in modern communications by making radios more affordable and easier to operate, while Raytheon’s work in developing radar, particularly shipboard radar, contributed to the Allied victory during World War II. Closer to home, the impact of the development and broad marketing of the countertop microwave oven is hard to overstate.

Raytheon has also seen its share of controversies and other challenges. In one widely publicized example, it faced major criticism for the reported accuracy of its best-known missile system, the Patriot. Following the Gulf War, the company found itself defending the Patriot missile system’s performance. This followed the release of a study by the US House of Representatives Subcommittee on Government Operations, which downgraded the Patriot to "modestly successful," with performance considerably below the seventy percent hit rate cited by Raytheon.

In 2006, Raytheon CEO William Swanson was found to have plagiarized large portions of his management text, Swanson’s Unwritten Rules of Management. The company had promoted the book and had distributed some 300,000 copies by the time the allegations surfaced. Raytheon’s board continued to retain Swanson as CEO but publicly penalized him by reducing his salary by $1 million.

Bibliography

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Saballa, Joe. "Raytheon Sells Cybersecurity and Intelligence Unit for $1.3 Billion." The Defense Post, 27 Oct. 2023, thedefensepost.com/2023/10/27/raytheon-cybersecurity-intelligence-unit. Accessed 20 Dec. 2024.

Thompson, Loren. "Enigmatic Raytheon Thrives as Defense Rivals Falter." Forbes, 23 July 2012, www.forbes.com/sites/lorenthompson/2012/07/23/enigmatic-raytheon-thrives-as-defense-rivals-falter. Accessed 20 Dec. 2024.

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