The US on Monday said it had awarded RTX's Raytheon unit a $22.9 billion contract to boost Tomahawk missile production as the Pentagon rushes to rebuild a munitions stockpile depleted by the Iran war.
Concern has been mounting that the Iran conflict is draining US inventories of air defence and precision-guided weapons such as Patriot and Terminal High Altitude Area Defence (THAAD) missile systems. President Donald Trump's administration has pushed back against those reports.
“The department called upon industry to expand munitions production, and RTX has answered that call,” Michael Duffey, Under Secretary of War for Acquisition and Sustainment, said in a statement.
In a separate statement, Raytheon said the seven-year contract, awarded by the US Navy, would allow annual production to increase to more than 1,000 Tomahawk missiles per year from 60. The agreement follows previous deals between Raytheon and the Pentagon.
The Tomahawk missile is a long-range precision-guided weapon that can be fired from ships, submarines and ground launchers.
“Tomahawk is the Navy's most important strike weapon, able to target hostile forces hundreds of miles away without ever risking the lives of our sailors,” Raytheon president Phil Jasper said.
“This landmark $22.9 billion investment accelerates the delivery of Tomahawk missiles to our warfighters at unprecedented speed,” Hung Cao, Acting Secretary of the Navy, said in a statement.
Monday's announcement firms up a framework agreement signed by the US military and Raytheon in February. It is the latest multibillion-dollar deal the military has signed with US defence contractors for new equipment.
An analysis from the Centre for Strategic and International Studies in July estimated US Patriot missile inventories had sunk to below 1,000 - from 2,330 previously - since the Iran conflict began in February, while THAAD inventories fell from 452 to roughly 250.
The Pentagon this month announced framework agreements with Northrop Grumman and Lockheed Martin to boost production of missile parts. The department said the agreements would allow production of Patriot Advanced Capability-3 (PAC-3) missiles to triple and THAAD to quadruple.
That followed a deal in July worth about $58.6 billion with Lockheed Martin to produce Patriot interceptor missiles.
Mr Trump signed an executive order in January aimed at identifying defence contractors issuing stock buy-backs and dividends during times of “underperformance”.
