US awards Raytheon $22.9bn Tomahawk production deal as concerns mount over dwindling munitions

The United States government has awarded Raytheon, a unit of RTX, a $22.9 billion contract to expand the production of Tomahawk missiles, amid concerns about dwindling munitions supplies. The Pentagon is striving to replenish its depleted stockpile of air defense and precision-guided weapons following the Iran war. Under Secretary of War for Acquisition and Sustainment, Michael Duffey, confirmed that the industry had responded positively to the call for increased munitions production.

Raytheon revealed that the seven-year contract, awarded by the US Navy, would raise annual Tomahawk missile production from 60 to over 1,000. This deal follows earlier agreements between Raytheon and the Pentagon, with the Tomahawk missile being a key weapon for the Navy, capable of striking hostile forces from afar without endangering naval personnel.

Raytheon's president, Phil Jasper, highlighted the significance of this $22.9 billion investment in accelerating the delivery of Tomahawk missiles to warfighters. Acting Secretary of the Navy, Hung Cao, praised the deal as a major step forward. The awarding of this contract comes after a similar framework agreement signed in February.

Recent analyses suggest that US Patriot missile inventories have dropped to below 1,000 since the Iran conflict began in February, down from 2,330 previously, while THAAD inventories have also dwindled significantly. The Pentagon has recently announced framework agreements with Northrop Grumman and Lockheed Martin to boost the production of missile parts, aiming to triple Patriot Advanced Capability-3 (PAC-3) missile production and quadruple THAAD output.

This follows a $58.6 billion deal with Lockheed Martin in July to produce Patriot interceptor missiles. President Trump signed an executive order in January to address issues of stock buy-backs and dividends by defense contractors during periods of "underperformance".