WASHINGTON, March 25 Waltham,
Massachusetts-based Raytheon Co said on Monday it will
pare its business units down to four starting on April 1 to
boost productivity and lower costs, resulting in annual savings
of about $85 million and the elimination of 200 jobs.
Raytheon, maker of the Patriot missile defense system and
other weapons, said the changes will not affect its financial
outlook for 2013, which foresees a drop in earnings of up to 12
percent. The company has 68,000 employees
The company's new structure will include four businesses
focused on Intelligence, Information and Services, Integrated
Defense Systems, Missile Systems, and Space and Airborne
Systems. Parts of the former Network Centric Systems business
will be added to each of the four units.
Raytheon and other big weapons makers are girding for
declining military spending after more than a decade of sharp
growth. Eager to maintain profits, many companies have announced
cost-cutting measures, layoffs and structural changes to cut
overhead and drive down the cost of weapons programs.
"Our new structure will help us enhance productivity,
agility and affordability in a challenging defense and aerospace
market environment," said William Swanson, Raytheon's chairman
and chief executive.
Top Pentagon officials are trying to rejig their budget
plans for fiscal 2013 after Congress passed a stop-gap measure
averting a government shutdown this week that left intact over
$40 billion in defense spending cuts on top of cuts already
proposed by the Obama administration.
Raytheon's board also elected Thomas Kennedy, the former
head of Integrated Defense Systems, to the new position of
executive vice president and chief operating officer. He will
lead the company's consolidation efforts and manage day-to-day
operations, while contributing to long-range strategic planning.
Loren Thompson, a defense consultant with close ties to the
industry, said the appointment of Kennedy as chief operating
officer signaled the start of succession planning for the
retirement of Swanson, who is 64.
Raytheon does not have a mandatory retirement age and
Swanson has not announced plans to retire anytime soon.
The company said Daniel Crowley, who joined Raytheon from
Lockheed Martin Corp in 2009, will succeed Kennedy as president
of the integrated defense systems business, while Lynn Dugle
will head the newly formed intelligence, information and
John Harris, who had headed the technical services business,
will be vice president and general manager of the new business
unit, reporting to Dugle.
The missile systems business will be headed by Taylor
Lawrence, who had been in charge of engineering, technology and
mission assurance at Raytheon, while Richard Yuse will stay on
as president of Raytheon's space business, the company said.
Raytheon shares closed 28 cents lower at $56.76.