Raytheon Recovering From Missile Delivery Delays, Air Force Says

Raytheon Co. (RTN) has recovered almost 30 percent of about $621 million withheld by the U.S. Air Force since 2012 because it missed deadlines for delivering missiles.

Raytheon, the world’s largest missile maker, received $179 million of the performance payments that had been held back as of March 5, Ed Gulick, a spokesman for the Air Force, said in an e-mailed statement. The funds were released under a revised delivery schedule agreed on in December 2012.

Raytheon told the Air Force it expected to get back on schedule by July in delivering complete Advanced Medium-Range Air-to-Air Missiles (AMRAAM) after falling almost 900 behind schedule because subcontractor Alliant Techsystems Inc. (ATK) had difficulty manufacturing the motor under the original milestones.

“We’ve been working very closely with Raytheon,” William LaPlante, the Air Force’s acquisition chief, said in an interview about the program. “Some things are getting better. We’ve turned the corner on that, but you are always discovering stuff and these are pretty advanced weapons.”

In addition to the missile, which is fired by pilots beyond visual range of an adversary, Waltham, Massachusetts-based Raytheon makes the Tomahawk cruise missile, the hit-to-kill warhead on the U.S. ground-based missile defense system and versions of the Patriot air defense interceptor.

Newest Version

John Patterson, a Raytheon spokesman, deferred to the Air Force for comment. Bryan Kidder, a spokesman for Arlington, Virginia-based Alliant Techsystems, deferred to Raytheon.

The delayed weapons are the newest version of the Advanced Medium-Range Air-to-Air Missile. They’re intended for deployment to Air Force fighter wings and Navy air wings once testing is done and they’re declared combat-ready.

Raytheon, which is due to report first-quarter earnings tomorrow, contracted with a second motor manufacturer, Nammo Group of Raufoss, Norway, to supply a new motor while manufacturing flaws in the original version were remedied.

Alliant Techsystems has qualified a new motor and is expected to resume deliveries to Raytheon in May, Gulick said.

The delayed missiles have been ordered by the U.S. and Taiwan, the United Arab Emirates, Finland, South Korea, Morocco, Chile, Jordan, Kuwait, Singapore and Turkey, according to the Air Force.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story: John Walcott at jwalcott9@bloomberg.net Larry Liebert, Steve Geimann

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