Agree: Mr. TK was using M&A to bring Technical value to the customer -> Warfighter!
Mr. GH, on the other hand is using M&A to bring value to shareholder -> Greed!
Major funding for RTX is coming from Tax Payers money to protect America. The DOD needs to evaluate the RTX leaderships wall street driven decisions!
Treason comes to mind!
You hit the mail on the head. Finally, someone has enough history to see it. TK taught Hayes well.
@vjv+1jhNxrCk and everyone else asking this question (which are lots). UTC just took an action from the same Playbook Raytheon used in the 90s. Raytheon was doing terrible in the 90s so to make their books good they bought Portions of Hughes (aircraft and missle divisions). At the time they were sitting on Billions of dollars in reserve for retirement funds. While they couldn't touch it, they sure as heck could hide behind it. You also had an army of Hughes heritage engineers at the time.
Fast forward.. Raytheon was well into the Green (maybe 4 billion?). UTC was in a shambles (maybe 14 billion in debt?). So "Merge" with Raytheon, hide behind their good luck, and at the peak sell all your shares getting rich. They allow the entire board to be taken over by UTC execs while you punch out with huge buyout and your reputation intact. Pretty smart I'd say.
It was greed. Pure and simple. He and the others got their platinum parachutes in one sitting. They didn’t give a you-know-what about the company’s most valued asset, as they like to say, the employees, or how the company would be sliced and diced like a steak on a grill in a hibachi restaurant. They knew what UTC was about and how they operated. It was simply a money grab on their parts.
Either greed or TK actually believed the merger would bring each company's technology together to leverage across all product lines. Remember the technology story was TK's primary explanation as the reason for the "merger".
Let's examine the technology reason. If this is true, TK and the legacy Raytheon leadership completely misunderstood the UT business model. UT is a decentralized company which buys profitable companies and allows these companies essentially run independent of corporate control. UT buys companies solely because they are profitable. There is no UT corporate strategy to share ("leverage") technology across companies. UT simply has no mechanism for this process to occur.
There is evidence of legacy Raytheon buying companies for technology (Solypis, BBN Technologies, Blue Canyon, etc.) so perhaps this mindset drove the UT merger. Note many recent purchases resulted in failure: Forcepoint (note acquired for $2.5B, sold for $1.5B), JPS Communications closed and sold in 2016. So, perhaps TK and his leaders actually believed the UTC merger would bring the best of each company's technology to the forefront for enterprise use.
Greed? One only has to examine the merger related SEC filings to realize the enormous amount of compensation paid to displaced legacy Raytheon leaders and to those retained in the new company. As an example, Randa Newsome, legacy HR VP profited over $13M in the award and sale of company stock related to the merger.
It's called a hostile takeover. UTC did a hostile takeover and disguised it as a "merger of equals" look at the Raytheon leadership that has stuck around vs ousted.
I've asked that question many times before. Why was raytheon sold? Was not in any financial trouble. Redponsecwas always hypersonic technology whatever that means. UTC was in trouble and taking RTN down with them.
Former Raythron CEO Tom Kennedy.
Can you please give background on post/comments? Who is TK?
Go big or go home.
Really, if that's true, why did he really sell off RTC? Company was in an excellent position cash wise. It had everything to lose with the merger..Still d-mbfounded..maybe someone here has better insight ?