Raytheon Technologies [RTX] on Tuesday said that long-time executive Wes Kremer will lead the company’s new Raytheon segment when it stands up in July as part of a reorganization of the company into three operating segments from four.
Kremer is currently president of the company’s $15 billion Raytheon Missiles and Defense segment. Before United Technologies Corp. acquired Raytheon Co. in 2020 to form Raytheon Technologies, Kremer was president of Raytheon’s Missile Systems segment for a year and before that he was president of the company’s Integrated Defense Systems segment for nearly four years.
The pending realignment of Raytheon Technologies into three segments, Collins Aerospace, Pratt & Whitney, and Raytheon, was announced in January. The new organization will stand up in July.
The reorganization is being overseen by Chris Calio, president and chief operating officer of Raytheon Technologies, who said during the company’s earnings call on Tuesday that the “major content shifts within our portfolio” have been decided. Implementation of the alignment is at the halfway point as is the company’s analysis and validation of planned cost savings, he said.
These shifts include consolidating the multidomain command and control solutions that are resident in RMD and the Raytheon Intelligence & Space (RIS) segments within the Mission Systems business unit of Collins, Calio said. Collins has deep experience in communications, connectivity, avionics, navigation, structural technologies and more for military and commercial aircraft and other defense applications.
The consolidation of the all-domain C2 capabilities within Collins will “create a more focused business to support connected battlespace opportunities,” Calio said.
The Defense Department is attempting to achieve a more connected battlespace through its joint all domain command and control concept that shortens timelines between sensing and effects regardless of military service.
Collins’s Connected Aviation Solutions business unit will also get the air traffic management business that currently resides within RIS, consolidating the company’s “connected ecosystem of flight data and management into one business,” Calio said.
“These two moves will put Collins at the center of our company-wide collaboration efforts,” he said. “They will now be responsible for more than half of our revenue synergy projects.”
The intelligence, surveillance and reconnaissance work within Collins will transition to the Raytheon segment, “combining complementary sensing and imaging technologies to improve our offerings for multiple customer applications,” Calio said. Raytheon will also combine the remaining RMD and RIS businesses into strategic business units that will be aligned to “specific customers such as the Air Force, Army, Navy, space and missile defense,” he said.
“When this is complete, the top customer of each of these strategic business units will account for 70 percent or more of that business unit’s sales,” he said.
Another key piece of the realignment is the establishment within the Raytheon segment of a strategic business unit that will act like a “merchant supplier” and “centralize components and subsystems that are sold” and to external customers, including government and industry, “enabling us to sell more effectively into these channels,” Calio said.
Raytheon Technologies will further update on the realignment during the Paris Air Show in June.
The RIS segment is led by Roy Azevedo, who is retiring.