Monday, June 10, 2019

Pratt & Whitney to merge with Raytheon. WSJ

Front page of today's Wall St Journal.  They called it United Technologies and Raytheon to merge.  United Technologies is the holding company that holds Pratt and Whitney.  Pratt is one of the only three jet engine makers in the world.  The other two are GE and Rolls Royce.  That means they are making about a third of all the jet engines made in the whole world.  That's big. 
   Raytheon started up in the 1930's making vacuum tubes and cashed in on the invention of radar in WWII.  Raytheon had good connections with the MIT Radiation Laboratory where the American radar effort was centered.  A lot of Raytheon people were old MIT grads, they kept in touch, and when the Rad Lab needed something built, they had Raytheon do it.  By the time I went to work at Raytheon in the 1970's they were big.  They had the fantastic anti ballistic missile radar project which I got to work on.  They were doing SAM-D which became the Patriot anti aircraft and anti ballistic missile system in time for the Gulf War.  Raytheon was the go-to contractor for Navy ship borne radars and later the Aegis missile systems for Navy cruisers.
   Any how, the merger, if it goes thru, to be called Raytheon Technologies Corporation will be the second largest defense contractor, right behind Boeing, and be worth $100 billion. 
   This will reduce the number of defense contractors, reducing competition, which will raise the price of defense contracts to us taxpayers.  Was I Donald Trump (I'm not) I would have the anti trust department over at Justice object to this merger on the basis that it is anti competitive.  Anti trust hasn't done anything since they chickened out of supporting Netscape from predatory pricing by Microsoft back in the 1990s.  There has been some talk in recent days about breaking up the big tech companies, but I haven't since any real action on that front.  Fat as I can see, the DOJ antitrust people simply draw their pay and don't do anything.

1 comment:

DCE said...

I enjoyed my days at Raytheon, having worked on PAVE PAWS, GPN-20/22, ASR, AEGIS, AIM-7F/7M/7P, AIM-54, AIM-9M/X, AIM-120, Patriot Ground, and a few other projects that shall remain nameless.

At one point Raytheon owned Beech Aircraft (I don't know they still do). That they will now own P&W makes me wonder if it will be a good thing or bad thing. Any company that gets too big tends to become inertia-laden and less able to respond to changes if it isn't structured properly. Let's hope Raytheon doesn't make that mistake.