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Playing with the big boys Once a middling defense firm, Raytheon, whose Patriot missile system was the star of the Gulf War, has thrust itself into the rapidly dwindling circle of dominant defense firms. The company shelled out a total of $12.5 billion in 1997 to buy large defense units from Texas Instruments and Hughes Electronics. Raytheon is now the third-largest defense contractor in the U.S., behind Boeing and Lockheed Martin. Just several years ago, Raytheon was looking to become less dependent on defense spending; the company was looking to convert its top-notch technology to private sector use. As a result, the company now offers mapping, medical imaging, and satellite communication products to the private sector. In June 2000, it entered the corporate-security market with the launch of its high-end Silentrunner software. At the time, six unnamed federal government agencies involved in defense, intelligence or law enforcement bought licenses for the software from the company. The defense industry has consolidated rapidly in recent years: Lockheed Martin is the product of a 1995 merger between Lockheed and Martin Marietta; Boeing merged with McDonnell Douglas; No. 4 Northrop Grumman is the product of a 1994 merger and had planned on merging with Lockheed Martin until the Pentagon and the DOJ objected to the deal. Raytheon felt that it needed to expand its defense business in order to stay competitive, and pursued deals that ended with the TI and Hughes acquisitions. The company's defense business now makes up about 75 percent of its sales. From radio tubes to the Patriot missile Raytheon started as a radio tube company in the 1920s and during World War II became the first company to produce magnetrons, tubes that are used in both radar and microwave ovens. After the war, the company expanded and diversified; it introduced the first microwave oven in 1946, and still produces a complete line of major appliances. The company has also become one of the nation's leaders in general aviation. Its products range from high performance piston aircraft to super mid-sized jets, which the company markets to both commercial and government customers. While the success of the Patriot in the Gulf War has aided the company in procuring further military contracts, it has been forced to respond to the defense industry slowdown that has accompanied the end of the Cold War. As a means of defending its own profits, Raytheon purchased E-Systems, a highly successful manufacturer of electronic and surveillance equipment, as well as the defense businesses of Texas Instruments and Hughes Electronics. Major changes In 1998, Raytheon plucked Daniel P. Burnham, a respected defense industry executive from AlliedSignal, to succeed Dennis J. Picard. While Picard, who will remain as Chairman and a member of the board to ensure that the transition, which officially took place in December 1998, proceeds smoothly, was known for his technical prowess and knowledge of the industry, Burnham is known as a financial hawk and efficiency whiz. The first outsider to become Raytheon's CEO, Burnham oversaw AlliedSignal's defense businesses (that company's largest unit). His appointment was roundly applauded by industry analysts who believe that Raytheon must closely watch its budgets after gorging itself with acquisitions. To start with, the acquisitions have left the company with about $10 billion in debt. To take a bite out of its costs, Raytheon is pursuing major layoffs - the company plans to cut 14,000 jobs, or about 16 percent of its workforce by the end of 1999. Shortly after its acquisitions of the Hughes and TI units, the company announced that it would lay off 8,700 employees; in October 1998, Raytheon announced it would cut 5,300 more. In April 2000, Raytheon also sold its ailing engineering and heavy-construction business to Morrison Knudsen Corp. for more than $800 million.
Raytheon's web site, located at www.raytheon.com, offers information on current openings and includes job descriptions, degree requirements, and contact information. Each Raytheon operation has its own employment office. Because of its defense-related business, many Raytheon positions require U.S. citizenship and a background check. Raytheon also uses recruiting processes like "walk-in open houses" and job fairs at colleges. For those who interview with the defense giant, "typically it's an all-day affair," reports one contact. "It usually starts with an interview by the Human Resources staff." After that interview, "you'll be taken to the department and meet with two or three people at or just above your experience level. Then you'll see a manager or two." When it comes to interviews, insiders say, they "vary from one department to the next." Reports one contact: "Mine was very technical and very demanding. I interviewed with several managers and department heads over a span of three days." However, that insider says, "I've also heard that some people only have one interview and sign on the next day if the offer is right." For inexperienced job seekers, insiders say "there may be a few technical questions, but the basic purpose of the interview is to determine if the applicant seems bright enough to quickly learn our products and processes, can effectively communicate, and is likely to work well with other people." Another contact agrees: "Recent college graduates are not bombarded with technical questions. Quite frankly, a recent grad is not hired for what she or he knows, not rather for potential."
The times they are a changin' With the acquisition of Hughes Electronics and TI's defense businesses, and the hiring of Daniel Burnham as CEO, insiders say, Raytheon is in a state of transformation. "The old Raytheon was rather centralized and bureaucratic," reports one insider. "The culture is now shifting more of the authority to do things down the organization." That contact continues: "It used to take a page of signatures to get capital requests approved or proposals released. Now the level of management required to approve such things is being lowered to the individual site managers." Another contact, who works for a group that formerly was a part of Hughes Electronics adds: "The present day Raytheon is much more concerned with the bottom line than Hughes Electronics was. Right now, the new CEO is pushing a strong business culture on the company." However, says that contact, "I don't particularly mind this because I understand the reason. A profitable company is ultimately good for me because I stay employed." Of course, Raytheon employees have a reason to be concerned about continuing employment. Recent cutbacks in defense spending have resulted in "widespread organizational changes" and "drastic" workforce they worry about their futures with Raytheon. Some employees say that "many advancement opportunities still exist" at the company- "especially for software engineers" - but others comment that Raytheon considers its employees as "disposable" and treats them as "numbers, not as people." Flexible dress, hours Raytheon isn't just changing in deep-seated business and organizational ways - it's changing in the way it looks, too. As one insider puts it: "The place used to look like a bank. Now it's dockers and shirt unless you're doing a presentation to your customer." A contact based in California reports: "The dress code is casual. Dockers, collared shirts, even nice jeans." The company's policy when it comes to work hours is also fairly lax, insiders report. "The work hours are flexible," says one. "You basically need to put in eight hours of work within an acceptable window of the day." Also, reports another Raytheon insider, "there's a 9/80 program where you work 80 hours in 9 days and get every other Friday off." A contact in El Segundo reports receiving "15 days off a year, plus major holidays, and also a year-end shutdown between Christmas and New Years'" Decent bennies and pay Raytheon offers its employees solid benefits and pay, insiders report. One says that "starting salaries seem to have increased in the last few years and should be competitive." Another shrugs: "I think I'm paid pretty well." Our contacts have the same, "not great, not bad" attitude when it comes to perks the company offers. One says "the benefits are OK, but they're not exceptional, just reasonable." Another insider is more specific: "We offer tuition reimbursement for graduate courses - you need a B or better to get full reimbursement." Also, "the company matches the first 4 percent you put into the 401(k)." Some units of Raytheon also have a "company-provided retirement program" but "this will be changing at the end of the year 2000 when the pension programs of all the various companies are merged into one." Job seekers will be happy to hear that not only are there "a variety of medical, dental, and HMO programs available," but that "the cost of these has actually gone down since the mergers."
Human Resources 141 Spring Street1 Lexington MA 01273
Electronics;Air defense systems;Design and construction of heavy industrial plants;Aircraft engines and parts;Appliances
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