Raytheon moving to Virginia
Raytheon Technologies is moving its headquarters from Massachusetts to Arlington, Va., making it the latest aerospace giant to double down on its military business at a time of tremendous uncertainty for commercial aviation.
The company said its new headquarters would help deepen its partnerships with the defense and intelligence agencies based in Northern Virginia, according to a release announcing the move. It also highlighted the region’s status as an airline hub.
“The location increases agility in supporting U.S. government and commercial aerospace customers and serves to reinforce partnerships that will progress innovative technologies to advance the industry,” the company said in an unsigned statement.
Raytheon has been based in the Boston area since its founding in 1922. It expanded beyond its military business and became Raytheon Technologies in 2019, when it acquired the industrial technology conglomerate United Technologies in an all-stock deal worth roughly $74 billion.
The merger gave Raytheon a deep foothold in commercial aircraft; its subsidiaries make jet engines used in Boeing and Airbus commercial jets, as well as a grab-bag of airplane parts, including rudders, landing gear, wing flaps and doors.
The next year, the coronavirus pandemic took hold, throwing the company and the broader economy into crisis. Numerous countries halted travel in an attempt to contain the virus, prompting many carriers to hold off on major purchases of new aircraft.
Commercial jet manufacturers saw demand for new airplanes fall through the floor, and the economic pain filtered through to suppliers like Raytheon. The company laid off thousands of employees amid steep declines in its sales.
The company’s business has since returned amid what Chief Executive Officer Greg Hayes called a “strong commercial aerospace recovery,” with sales rising 3% in the first quarter to $15.7 billion.
The company’s military business fell 12% in the most recent quarter after the Defense Department bought fewer F-35 fighter jets. Still, Hayes said in an April 26 call with investors that he believes Raytheon is well-positioned to benefit from growing defense budgets in the United States and elsewhere.
“We were seeing an increase in defense spending before any of this nonsense in Ukraine with the Russians,” Hayes told investors.
“So, I think, again, the trajectory is better than what we had expected,” he said. “I mean, I would go back two years, when the merger first occurred, we thought defense spending was going to be flat to up slightly. And I think everybody recognizes the need for modernization and the need to prepare for — to deter these folks in a more robust fashion.”
With Raytheon’s move, all of the nation’s Big Five defense contractors will be based in the Washington area. Lockheed Martin, the world’s biggest defense contractor, has its headquarters in Bethesda, Md., while Northrop Grumman and General Dynamics are based in Falls Church and Reston in Va., respectively. Boeing announced its move to Arlington on May 5.
All of them have long had significant operations in the Washington area. Raytheon’s intelligence and space business is in Arlington’s Rosslyn neighborhood, which will also be the site of the new headquarters.
In a statement, Virginia Republican Gov. Glenn Youngkin commended the company’s leadership and its mission to “build a safer, more connected world.”
“With four of the top five major U.S. aerospace and defense leaders now based in Virginia, this decision to headquarter in Arlington demonstrates that the Commonwealth is the best destination for the aerospace and defense community,” Youngkin wrote.
Raytheon said in its news release that it had not sought any financial incentives from any state or municipality to relocate the headquarters.