Raytheon Looks to Secure More International Sales

10/24/2012
By Yasmin Tadjdeh

By Yasmin Tadjdeh
As domestic budgets have tightened, Raytheon Co. is working to increase its foreign visibility, one executive said.
With contracts across the Middle East and Asia, Raytheon has worked to build relationships with foreign countries, said Tom Kennedy, president of Raytheon’s Integrated Defense Systems (IDS) business unit at a media roundtable in Washington, D.C., on Oct. 23.
Raytheon recently secured a $45.3 million contract with the U.S. Navy "to provide MK 54 lightweight torpedo hardware, test equipment, spares and related engineering and repair services for U.S. fleet inventory and in support of foreign military sales to the Royal Australian Navy and the Indian Navy," according to a press release.
It has also worked with South Korea and the United Arab Emirates in the past, and has production facilities in Australia, the United Kingdom and Canada.
For Raytheon, and IDS in particular, one of the key ways for international success is to have a presence in a country and foster a true relationship, Kennedy said. One way to do this is by employing local workers, he said. For example, in the Middle East, Raytheon hires educated youth from countries such as Saudi Arabia, Kennedy said.
“As companies go to do work in the Middle East, they are going to have to come to the realization that they just can’t be selling products … we also have to think on how that is going to be carried out and implemented in a way that provides some other economic benefit for the country, such as jobs,” he added.
International deals make up a significant portion of IDS’ business, with 54 percent coming from foreign contracts. International contracts make up about 25 percent of Raytheon’s business in total, Kennedy said.
Although the company is still doing well, particularly in international waters, sequestration is still a major threat, Kennedy said.
“The fog of uncertainty is probably our biggest issue that we are trying to deal with, and so any time we can take that uncertainty and grab it and make it certain, that’s what we’re trying to do,” Kennedy said.
When the future is murky, decision-makers are afraid, Kennedy said. In order for the defense industry to continue garnering contracts, sequestration must be resolved, he said.
Sequestration is an uncontrollable force, but for what a company can control — such as products and relationships — Kennedy said Raytheon is doing all it can and “aggressively” working on the international strategy.
Raytheon is not the only defense contractor looking to international contracts to make up for dwindling domestic opportunities in the face of sequestration.
Last week, Lockheed Martin held a press conference in Crystal City, Va. where theyshowed off Naval products geared towards foreign nationsincluding its Littoral Combat Ship, the MH-60R maritime helicopter and the AN/TPQ-53 Counterfire Target Acquisition Radar.
Photo Credit: Raytheon Co.

Topics: International, Procurement

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