Raytheon Secures Seven-Year Pentagon Deal to Dramatically Expand Missile Production

BY COMFORT OGBONNA

Raytheon, a unit of RTX, has signed a seven-year agreement with the U.S. Department of Defense to significantly ramp up production of a wide range of critical missiles, including Tomahawk cruise missiles, air-to-air weapons and ballistic missile interceptors, the company said on Wednesday. The deal reflects Washington’s urgent effort to replenish weapons stockpiles that have been drawn down by years of global commitments and rising geopolitical tensions.

The Pentagon’s push to expand production capacity comes as the United States races to rebuild depleted inventories and ensure it can sustain prolonged, high-intensity conflict if necessary. The Raytheon agreements follow a series of similar multi-year arrangements struck between the administration of President Donald Trump and major U.S. defense contractors, designed to lock in government demand and give companies the confidence to invest billions of dollars in new factories, tooling and workforce expansion.

Recent deals signed by Lockheed Martin point to a broader shift in U.S. defense acquisition strategy, with a stronger emphasis on long-term planning and rebuilding America’s industrial base. Officials and industry leaders have warned that decades of just-in-time manufacturing and limited surge capacity have left the defense sector ill-prepared for large-scale or prolonged warfare.

Under the Raytheon agreements, production of Tomahawk cruise missiles is set to rise dramatically. Annual output for the U.S. military is expected to increase from roughly 60 missiles per year to as many as 1,000 units over time. The sea-launched Tomahawk, a core component of the U.S. Navy’s surface and submarine fleets, provides long-range, precision strike capability against land-based targets. The newer land-based variant extends similar strike options to ground forces, expanding the missile’s role across multiple domains.

Production of AMRAAM air-to-air missiles will also climb sharply, reaching at least 1,900 units annually. The AMRAAM is the primary beyond-visual-range air combat missile used by the U.S. Air Force and Navy and is a key element of American and allied air superiority.

Ballistic missile defense systems are another major focus of the agreement. Output of SM-3 Block IB and SM-3 Block IIA interceptors, both deployed by the U.S. Navy, will rise substantially, with production of several munitions expected to grow by two to four times current levels. These interceptors are designed to destroy short- to intermediate-range ballistic missiles in space, forming a crucial layer of missile defense. Production of the SM-6 interceptor is also set to expand to more than 500 units annually, up from about 125. The SM-6 is a highly versatile weapon, providing air defense, anti-ship and ballistic missile defense capabilities in a single system.

RTX said the agreements use a “collaborative funding approach” that allows the company to preserve near-term free cash flow while still making long-term investments in production capacity. This structure is intended to accelerate deliveries without placing excessive upfront financial strain on the company.

The deal comes amid a broader effort by President Trump to overhaul the defense industry and pressure contractors to deliver weapons more quickly. In January, Trump signed an executive order tying defense companies’ dividends, share buybacks and executive compensation to weapons delivery schedules, a move that introduced new uncertainty around capital returns but underscored the administration’s focus on speed and accountability.

“These agreements redefine how government and industry can partner to speed the delivery of critical technologies,” RTX Chief Executive Officer Chris Calio said in a statement. The company did not disclose the financial value of the agreements.

Missile production under the new framework will take place at Raytheon facilities in Tucson, Arizona; Huntsville, Alabama; and Andover, Massachusetts. The agreements closely mirror recent framework deals reached by Lockheed Martin, which include plans to quadruple annual production of THAAD interceptors to 400 units and increase Patriot PAC-3 missile output to 2,000 per year under similar seven-year contracts.

Together, the deals signal a decisive shift toward long-term, high-volume weapons production as the United States seeks to strengthen its military readiness and industrial capacity in an increasingly volatile global security environment.