Raytheon, United Technologies Merger Will Create A New Aerospace Giant
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I would be shocked if this lead to significant site consolidation due to the backlash that this would cause from Congress. If anything, this will enable Raytheon (the company with more defense content) to use United Technologies facilities to create a larger network of appreciative Congressmen for large projects.
It's a pretty common trope that you'll hear people saying this regardless of industry.
Is there anything else that lead you to feel you'll never work for a defense contractor?
Is there any defense contractor that pays anywhere near industry standards?
Honestly, though, defense contractor pay is less location-dependent because a lot of the jobs are billed through to the DOD. Defense jobs can even best the industry--- just not in major areas with high costs of livi g.
The 401k match was 6% which, while good, didn't even come to what my wife gets from her non-profit. I was paying 25% of my health coverage, which is the highest proportion if any of my five employers. (I will day, though, that Raytheon had the best family coverage rates of any of them.)
I was salaried, and other than a few times was required to record no more than 40 hours in my timesheet regardless of how much time I needed to put in. The work/life balance was highly dependent on the program you were on, and I got trapped on a bad one.
If you were told to record no more than 40 hours in my timesheet, then that means you DO NOT put in more than 40 hours. You're supposed to go home. If you were told to stay and this was for a government contract, it's a violation that you're supposed to report. Unless this was decades ago, you got training that told you so.
We dabbled with big image sensor arrays but the sparing for yield was messy and we never came to grips with how to deal with the situation where the working sensors were in random locations in the array. It seemed to really mess up all the important systems level calculations. We also never completely worked out testing. The big logic chip had BILBO blocks so we could just put it in self test mode, run a lot of clock cycles, check the signatures, and switch in the working blocks. The sensor array needed more than that. Perhaps solvable issues, but we never got around to it.
It could also be worth considering that anyone who makes the choice to work for such an employer has already reached ethical conclusions they are comfortable with.
I worked in R&D, which sounds cool, but essentially means that you’re project’s budget is at the whim of the highest-level executives, who are utterly out of touch with the engineers (looking at the org chart, they’re literally 7-8 levels above me).
Because of that, EVERY single project that I was on was cancelled, due to budgetary reasons. The executives would get really excited about something new, and reallocate funds to new projects.
Nothing ever got done. I saw zero projects get shipped. I never saw a customer - because there’s is no customer. There’s not even a government contract. It’s internal R&D.
The only thing I ever got reprimanded for was not spending my money - there are much harder problems to solve than that.
The particular complaints I heard were all about bureaucracy, time tracking, accountability, etc. I can sympathize, but I know some people with the right personality type who thrive in that environment.
Defense has rules around supply chain enforcement. Everything you do has to be auditable.
Some people can't stand living under that kind of microscope, with such rigid rules and procedures. Some people struggle to be productive in this environment, even though they are perfectly productive in other environments. Same thing applies to other environments... some personality types won't usually thrive at small companies, but do well at large companies, and vice versa.
It’s not that defense is inherently toxic or good, I’d like to be clear what I’m saying. I’m saying that whatever good or bad management you have, there is a ton of legal compliance you have to deal with on top of that. So the baseline level of frustration an bureaucracy is higher than what you might be used to, even with good management. But this makes sense! Development OF COURSE slows down as soon as you are, say, building something that will affect whether somebody lives or dies.
Some amazing, skilled, productive engineers work in defense.
Same with medical technology. They tell stories of the Therac-25 to scare people away in college, and in spite of that, people are still willing to put in the work to make new radiotherapy devices, even with all the red tape.
Same with civilian (non-defense) aerospace.
I worked as a developer at a large bank and it had a very similar environment. I enjoyed it a lot, and I absolutely despise startup culture.
Some things that I personally enjoyed:
- In general older coworkers from academic backgrounds, more diverse, more grounded. The one gig I had a small startup felt like boyscout summercamp.
- no marketing, no attention seeking, no childish competition, work focussed on actual work. People left when the workday was over.
- Generally interesting technical challenges, not really consumer facing, very little fuzz about the newest frameworks or management styles or whatever, progress was measured, teamwork was valued over individualism.
- Very reliable career opportunities. If you do well you have a career to look forward to, no rapid up and down or hopping around.
Age discrimination is generally much less, but can be a problem on certain contracts. Sometimes the government thinks they'll save a bundle by getting less experienced people to do the work. They usually repent of that the next time a contract comes out. The experienced / good people can always find another contract to go to.
I've seen all manner of processes from very well done agile, to poorly done agile, to waterfall, to no process at all.
On call depends on the contract, but is not typical.
Picking something more normal, Tesla pays software developers just $78k to $147k. Raytheon can beat that. This is without even trying to adjust for hours (a 9-to-5 place, or Elon Musk cracking the whip) or the fact that Raytheon locations typically have a far lower cost of living. Just on raw numbers, totally unadjusted, Raytheon wins.
Google pays almost nobody. The whole firm, called Alphabet, has just 98,771 full-time employees. Most of those are not really "in the world of tech" though, with many devoted to stuff like marketing and human resources. It looks like about 40,000 are engineering talent, but not all of that will be software.
There are over 40 million software developers. At most, about 1 in 1000 work at Google. Again this assumes that all the technical staff at Alphabet is software developers working for Google, but that assumption is clearly wrong. There are hardware people working on cars and phones and more.
That 0.1% is practically nothing. Approximately nobody works for Google. It is just crazy to use Google as a standard for tech pay.
It's like asking why an athlete would be a gym teacher when the NFL pays so much better. It's like asking why a person would give kids private music lessons when you can make so much more money singing like Madonna. It's like asking why a person would be a mayor instead of being the US president.
Furthermore...
You are incorrect about the benefits being offered at defense contractors. Some do have free food, bonuses, decent pay, and even stock options. I've gotten all those things at defense contractors. Another advantage is a 40-hour work week. Another advantage of many defense contractors (not all) is that your coworkers are trustworthy American citizens who don't behave erratically; they have all passed a background check.
Being in college while young, hopeful, newly independent, without major responsibilities, and close together with thousands of others creating lifelong friendships really is one of the best times of many people's lives.
We were parters with Boeing on the project I worked on, but bidding against them on other projects.
Raytheon got rid of all its commercial ventures, Amana appliances, RayMarine, Beech aircraft and anything competing in the private sector was spun off. There corporate structure had a lot of legacy from previous mergers (before my joining) which seemed to be stuck at 85% complete.
I can't see how this merger isn't going to set off anti-trust alarm bells in washington, but these companies are well connected.
Semiconductor industry is heading this way too
I'm by no means an expert in this, but I think its largely attributed to the contracts going to the lowest bidder, a struggle to compete for them, and move R&D forward simultaneously.
A lot of things that don't really make sense on a military level make a lot more sense on a corporate welfare level. Each Virginia-class submarine is built half at Newport News in Virginia and half at Electric Boat in Connecticut; this is far more expensive than just building the subs in one yard, but is intended to keep both submarine manufacturers in business. The Ford class carriers and F-35 warplanes both contain numerous design innovations that don't really work in practice, but could be viewed as experimentation so that we have engineers with experience in various techniques should we ever need to rapidly build up the military later. The F-35 itself has a large number of subcontractors; you could look at that as a way to make sure that expertise in the program remains widely distributed across as many firms as possible.
I suspect the government is content to allow mergers because it doesn't really reduce the deterrent value of having these programs exist, and the whole point of their existence is to funnel money to defense contractors. If we actually got into a major arms race you'd probably see an explosion of new defense contractors as people start chasing the money available, but for now we're at peace with a shrinking military.
https://en.wikipedia.org/wiki/List_of_the_lengths_of_United_...
Almost so much so, that it seems like a reason to keep them alive.
A major conflict would require a lot of new manufacturing.
I also wonder whether the assumption that the next big war will a great-power conflict with China, Russia, etc. will actually hold. Our template for what war looks like is WW2, because that's the last time in living memory that the whole world erupted in high intensity warfare. So we've naturally built a military machine to fight the last war, but with bigger and more high-tech weaponry.
But historically, Peter Thiel's observation that "each moment in history happens only once" may be closer to the truth. The era of nation-states duking it out with industrialized armored weaponry started with the Russo-Japanese war in 1905 and ended with WW2 in 1945; it had never happened before, and it never happened afterwards. The previous template for wars before then were the "wars of nationalism" (U.S. civil war, unification of Germany, unification of Italy) in the 1860s-1870s - these had some use of industrialization, but still featured things like cavalry charges and generals personally leading troops into battle. Before then was Napoleon's conquest in 1812, and before that were the American and French revolutions, both of which were very different types of war with entirely different political groups on each side.
For all we know, the next major war might look like Syria but on a global scale, with numerous non-national actors all fighting over territory, resources, and mindshare.
This criticism might loosely have been true in the 1980s to 1990s, but doesn't seem particularly relevant now.
> But historically, Peter Thiel's observation that "each moment in history happens only once" may be closer to the truth.
It's obviously literally true, and it's been recognized as true more broadly in military matters since before Thiel was born. What is always in dispute until the next war starts is which lessons learned from the last one are critically in error now, not whether that will be the case somewhere.
His theme is something like this, but stressing the coupling between technology (what weapons, and economies, are possible) and law (what states, and what goals, are thought legitimate) and wars.
The 20th-C meat-grinder armies were unique, in that they were both possible to sustain, and useful. And in turn the countries which survived were ones that could support them (i.e. not the Ottomans, the Austrians, etc) for which he reserves the term nation-state -- they had, and needed, a much higher degree of cohesion than had been common before.
He lays out a number of distinct eras before this, with their own notions of what states were, and should do, and could do, and how this all interacted.
Highly recommended if you can stomach 1000-page tomes & skip a lot. I wish there was a great more-popular presentation but I don't know of one.
1989/1991 to 9/11/01 was genuine aimlessness and downsizing, missing the boat on a bunch of important developments, etc.
9/11 to Iraq War was massive IC expansion and trying to assign "counter terrorism" to any budget line item.
Iraq from ~April 2004 to ~2011 was the massive retasking toward occupation and LIC. That sort of continued until 2014 in Afghanistan as well. This was also when CIA went from an intelligence agency to a global strike agency, and when JSOC became the second most powerful military in the world (after the US-except-JSOC).
2013/2014 was when they realized that they'd basically cannibalized/neglected the entire conventional military and couldn't fight real wars anymore and then did the "pivot to Asia" under Obama, which has continued under Trump. There are still some serious problems (like Pacific Fleet being...substandard, despite being critical).
They're now basically not planning to occupy anyone ever again, given how badly Iraq/Afghanistan have gone (and would love to get out of Afghanistan to the degree possible); the purpose of the military is now fighting near-peer adversaries (China, to some extent Russia) while continuing to make contractors rich and get congressmen re-elected.
It'll be interesting to see if this new strategic priority is actually accurate in the near future.
I hope this kind of conflict never happens; US v near-peer basically is vanishingly small distance from full-on nuclear WW3 total war, and even a conventional conflict at that scale (or a more limited scope but still all-out within that space) will be incredibly destructive to even the winners.
The wars we're more likely to see are second/third tier powers fighting as well as cyber. However, the lower probability but high severity events need to be mitigated, which is why we need the triad, a substantial navy, ability to rapidly deploy at divisional strength, prepositioned WRM, etc.
>the purpose of the military is now fighting near-peer adversaries (China, to some extent Russia)
I agree with you here, but this seems like a massive contradiction. I don't understand how one would win against a near-peer adversary without occupying something, e.g. Taiwan or Hong Kong or parts of Eastern Europe.
I think the problem with occupying countries is when the people in the country don't want us there. Occupying companies that want you there isn't really an occupation.
The problem when they "want you" is that your occupying Army now has to do things like government administration and nominal policing, something the United States military hasn't done, at least convincingly well, since WWII (one could make an argument this started going well at the end of the Iraq war but I would heartily disagree). It's just a different type of occupation.
Doubt it. The US has basically close to zero experience in such a conflict. Even the 2nd WW was mainly a Russian-German war in Europe. 9 out of 10 German soldiers fell on the Eastern front and the US had already a much larger population and industry then Germany.
In Addition, the Navy would be not very useful to engage an able opponent: http://www.johntreed.net/sittingducks.html
https://www.opensecrets.org/industries/lobbying.php?cycle=20...
Lol. Regarding Venzuela, there is still exactly zero appetite among the general public for another nation building boondoggle. So what if they have oil. We have plenty of oil too. The idea of "building" a friendly nation that's dependent on us to sell us oil has little upside these days.
Regarding Iran, the defense industry is drooling over the idea that the next president may thaw relations and they'll be able to sell to both sides of the Iran/Israel standoff.
Si vis pacem, para bellum.
The greatest victory is that which requires no battle.
Part of why we invest in defense is to ensure we never have to fight. True war is costly, by definition.
It should be used as a last resort, when no other tool is available. Conversely, if you do have to deploy it, you want to be sure that it “changes the equation”. In other words, If it didn’t truly hurt/disable you or your opponent at the end if it, then there was no reason to do it in the first place.
How does this relate to current US defense posture? In short: we want to make it such that no one wants to have a real fight with us, that instead they prefer discussions/diplomacy (at least at the nation state level).
While folks complain about how much we spend in defense, a lot of it is not for the result per se (though ensuring cutting edge capability is important), but more to make the point that we are spending X times a given country A. This is intended to make country A less interested in being a bad actor to the US.
Is this perfect? Probably not. Is there lots of waste? Certainly. But overall it has generally worked, and as such underlies much of why the US does what it does with military spending.
Wonder if Capella Space will break through.
While you might not end up closing off entire regions, if both companies have offices in, say, Dayton ohio servicing Wright-Patt you can reduce to one and not worry about spare capacity anymore. That can save a lot - especially when bases are super remote.
You see this a lot with mid-range providers when interest rates are low and coming up with X Billion is no problem. I don’t know that it ends up providing better service to government - I would bet the answer there is absolutely no, especially as they recoup costs from the acquisition and squeeze staff. Win for the execs though.
The main reason this is relevant from my perspective is that Rockwell Collins, a major employer in Cedar Rapids, Iowa got bought out by UTC a year or so ago, and the clip on the radio about the merger this morning suggested the deal went the other way and the new Collins Aerospace was likely to be renamed into something else. But Collins Aerospace is one of the four main divisions of the proposed new company.
I think the merger is about 2 things. 1.) neither company has a “Platform”. United builds jet engines, Raytheon, sensors and missiles. But Lockheed builds the F-35. I think this is about Raytheon getting closer to having platform capability, instead of the constant squeeze the platform owners put in their subcontractors. (Both in price, and function, which is lockheed making their own sensors and cutting out Raytheon biz. 2. I think it’s a debt/revenue restructure advantage for United, they’ve got lots of debt they can spin off without losing revenue, acquire a cash positive company, and look great to stockholders for the next few years and pay out fat dividends. (Which benefits who? all the executives who own tons of stock and make decisions).
Entire Congressional Districts whose main employer is either Raytheon or UTC could see their plants consolidated. Or closed.
Lobbyists for both companies will be working with each other on projects and initiatives, which could result in pressure for other defense companies to merge.
It's amazing and refreshing when a company breaks this costly trend. Relative newcomer SpaceX is already up to at least 5 states plus DC.
Kind of like how the electoral college system vs. popular vote system influences where presidential candidates campaign, I believe Raytheon will have a greater incentive to target one or two communities with a lot of sway at different political levels as opposed to several districts with little. It's cheaper to do and more cost effective.
Maybe I don't see it the way you do, but I do not see this as a net positive for communities whose sole employer is Raytheon. The measures I'm using are wages, employment, and quality of life.
I'll give it a look.
It's pretty rare for a single office to create, from start to finish, an entire product, like an engine or missile. The assembly line is distributed in the first place, with separate offices attaching, refitting, and validating different pieces of the entire weapon system.
So I do not believe this comment comes from a place of knowledge on this subject. My comment also asserts that factories are not static, just because they produce something now doesn't mean that they can't be assigned something later.
On the other hand, Hell.