Monday, September 2, 2013

Syria Strike Could Bring Huge Raytheon Payday

Politco reports:
A U.S. attack on Syria could translate into big bucks for defense giant Raytheon, which makes the Tomahawk cruise missile that’s said to be President Barack Obama’s weapon of choice.
Reports that the White House is planning an attack to punish Damascus for the use of chemical weapons sent Raytheon’s stock price to a 52-week high this week — and have reawakened grumblings in Congress that the military doesn’t buy enough Tomahawks[...]

On paper, the Pentagon buys 196 Tomahawk missiles a year, considered the “minimum sustaining rate,” or just enough to maintain the supply chain. But the Navy, which did not respond to a request for comment, has had to ramp up production after firing hundreds of Tomahawks during Libya’s 2011 civil war.

Accounting for the extra orders, Raytheon has delivered 252 missiles this fiscal year and 361 last fiscal year. And any Tomahawks fired at Syria would almost certainly represent a future increase in orders for the missiles, which can go for about $1 million apiece.

“There’s a number that has to be available,” said one defense lobbyist. “If they fall below that number, they’ll replace them.”

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