Raytheon, a manufacturer of the acclaimed Patriot missile defense systems, was the latest defense company to announce financial losses due to the COVID19 pandemic. It cost them tens of thousands of jobs and millions of dollars in lost profits. Hayes predicted that this segment of the market would not experience a sharp recovery, but a вЂњlong, slow recoveryвЂќ for several years.
The company is also cutting its infrastructure by more than 20% from a previously announced figure of 10%. Hayes said that even after the pandemic dies down, he will continue to leverage advanced telecommuting capabilities as part of a multi-year cost-cutting strategy.
According to third-quarter data released by Raytheon, Pratt & Whitney recorded an operating profit loss of $615 million, compared with a profit of $520 million for the same period in 2019. However, military sales rose 11%, thanks in part to participate in the production of the F-35.
Collins managed to post an operating profit of $ 526 million for the quarter, but that's down 58% from the previous year. Total Raytheon's bottom line fell 51% for Pratt & Whitney and 52% for Collins Aerospace, while military sales rose.
With regards to the dismissal of employees. Raytheon's policy in this regard is not entirely clear. If the pandemic did not affect sales of military equipment in any way, and Poland's military budget can be cut endlessly (which, in fact, is what almost all American defense giants are doing), then why not just reorient 20,000 people to the defense sector? If there are orders and finance there, it will not worsen unemployment during the pandemic. Some people could be sent to the newly opened plant in Romania.
Defense segments such as radar, space, and missile technology offset a significant portion of the losses, allowing the company to report sales of $14.7 billion and operating income of $434 million for the quarter. In addition, Raytheon announced $928 million in profits on some вЂњsecret orders.вЂќ
However, the company's policy is adamant. The CEO is determined to cut costs for the company and do it at the expense of workers. вЂњAs you know, in the first quarter, we set goals to cut costs by about $2 billion and take action to save about $4 billion in cash while taking complex but necessary headcount reduction actions,вЂќ he said.
The reduction of jobs, as a rule, leads to an increase in the burden on the remaining staff but does not lead to an increase in their salaries. Looking at other American corporations affected by the pandemic, such as Boeing, Northrop, and Lockheed, it seems that the civilian aircraft industry is living out its last days, while a powerful military machine is just gaining strength.