View From the Top conversation with RTX

Thanks for having me.

Yeah, first of all, thanks again for having me here. As I look at the performance of our systems, I would summarize it to say that our systems are delivering as promised. What do I mean by that? They're protecting lives, they're saving lives, they're protecting critical infrastructure, and they're actually performing so well it's serving as a deterrence to future aggression. That's certainly our perspective at RTX, but we're hearing that from our customer base as well. Almost every customer interaction I'm having these days, the customer usually ends a meeting with something like, 'Your systems are so effective, they're performing so well, and we're very happy with them, but we need more of them and we need them faster.' I think part of the reason they're saying that is some of the examples we've seen, whether it's in Ukraine, the shipping channels in the Red Sea, or the Middle East region. Let me use an example of the attack last year that Iran had on Israel. Iran launched over 100 ballistic missiles, dozens of cruise missiles and drones. They threw a lot at Israel on that particular attack, and it could have been an absolutely catastrophic event. Not only did they throw a lot at them, they didn't just launch them from Iran, they launched them from various points that their proxies had throughout the region. So it was a very complex, very well-coordinated attack. Cities like Haifa and Tel Aviv could have had tremendous loss of life and destruction of infrastructure, but what resulted was only one death that night. That's one too many; we never want to see our systems let anything through. But setting in context what it could have been and how that transpired, some of the things we learned was the effectiveness of the system. It started with the radars we produce, like our Tippy 2 radar, the Patriot system, our airborne APG82 radars. They detected the launches, characterized them in terms of what is the threat, where is it headed, where's it coming from, and then they continued to track them. That enabled the interceptors we produced, like the family of Standard Missiles, the AMRAAMs, to destroy virtually all of those targets. When you see results like that and how proven the systems are in battle, they're battle tested, that's creating that pull from our customers. They're asking us, 'Give us more, give us those systems even faster.'

It's a huge focus for us right now. When you see the results like I just talked about, our systems performing, it's a real motivation factor for our workforce. We are very focused on three key areas in the business right now. The first is ramping up production. We've got hot production lines for all these systems. In fact, if you look at the key interceptors we're producing across RTX, on average we're increasing production rates this year 74%. A couple examples: our Coyote interceptor, used to counter unmanned aerial systems, counter UAS. Tremendous demand for this system for two reasons. One is the cost; it's very affordable and the cost per kill ratio is very attractive. The second reason is it's battle tested and very effective, with over 170 combat kills to date. We're ramping that production up by 90% this year. Look at AMRAAM, one of the most prolific air-to-air missiles in the global inventory. Demand has been incredibly strong. Last year we doubled production, we're doubling production again this year, and we're going to continue to increase that. The way we do that is the second focus area: we're investing in facilities in states like Texas and Alabama and other places to increase capacity. Last year we broke ground on a $115 million expansion of our missile integration facility in Huntsville. We opened a state-of-the-art $450 million manufacturing capacity in our Texas campus that is producing critical systems and components for over two dozen defense programs, and creating collaboration space for 1,700 employees to continue to innovate and generate the next generation of capabilities. That leads to the third focus area: we have to continue to accelerate our investment in the next generation of technologies. The threat environment is not standing still. Every attack creates a learning environment for us. We need to continue to innovate and accelerate development of new capabilities and evolve existing ones. I have an advanced technology organization in my group very focused on things like composable weapons, software-defined apertures for our radar systems, helping us stay one step ahead or even more from the adversary.

Absolutely. RTX is very well positioned to leverage commercial. We have a nice balance across RTX between commercial aerospace and the defense segment. One of our core tenets is how do we take commercial technology that's at the forefront and leverage that into our defense products. That allows us to deliver capabilities faster and stay at the leading edge of what commercial technology can provide, from engines to electronics and systems to radars. We can leverage that across the business. What's really important is to make sure we have systems where we can share our people internally across commercial and defense, and that we're talking to our customers so the acquisition system supports acquiring commercial systems. They may not be exactly the same, but they're of a type. The FAR Part 12 acquisition allows us to acquire that technology as commercial of a type and continue to enable companies like ours to leverage that commercial heritage and breadth of experience and products.

Looking at the threat environment, the capabilities of potential adversaries continue to evolve. They have high-end ballistic missiles, hypersonics in development, and all of those present a threat to the United States. This bold vision of a Golden Dome for America is something we're fully supportive of. We think it's really needed to protect the United States, our infrastructure, and lives. We're absolutely very supportive and we think it's very achievable. There's always some question about how achievable it is, just PowerPoint engineering. We think it's very achievable. We're embracing three principles around Golden Dome. First, start with existing proven systems that are in inventory today. They have hot production lines, they're battle tested, proven around the world. Within the next 6 to 18 months, we could deploy at half a dozen to a dozen critical infrastructure sites key capabilities defending against unmanned threats, aerial threats, cruise missiles, ballistic missiles. Those systems are available today. Over time, the second key principle is continue to innovate around the next generation of capabilities to fill gaps, extend capabilities with systems that allow for larger, longer protection. The third key principle is embracing that this is an all-of-industry approach. It's not just the defense industry. As much as I'd like to say RTX could solve the entire Golden Dome problem, we can't. We have to partner with commercial businesses, maybe companies that traditionally haven't been defense systems providers, because the technology and capability is there. We fully believe this should be an all-of-industry approach.

Today we've got counter UAS systems that I talked about, including radars and interceptors. It's not just our interceptors; other companies make counter UAS systems that could be included. You add the National Advanced Surface-to-Air Missile System, or NASAMS, to help defend against aerial threats and cruise missiles. You build Patriot around that, and now you start to defend against ballistic missiles. You can do that at critical infrastructure sites today, and then evolve over time to include things like THAAD, the Tippy 2 radars with the Standard Missile family. You can do that on annual or every two-year increments, and then build that space layer over top to get complete national coverage that Golden Dome will provide. I think that's very achievable with the vision that's been laid out.

Thank you.