Ivo Skoric on Wed, 20 Oct 1999 16:33:06 +0200 (CEST)

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<nettime> The Raise and Fall of Raytheon

Raytheon makes Tomahawk missiles and Patriot missiles - two latest
technologies on which American offensive and defensive military supremacy
rests. Patriot missiles the U.S. sells to its clients who need to defend
themselves from possible incoming missile strikes (like Israel in the Gulf
war and Taiwan now). Tomahawks are not sold even to NATO countries with
the exception of UK. The US closely guards its most dangerous weapon, the
weapon that enables it to hit DEEP into the heart of any country, hit
precisely what it wants and all that without risk of casualties and
without even being noticed. That however makes the market for Raytheon
products extremely narrow. 

Originally, 20 years ago, Tomahawks were designed to hit Russian nuclear
missile launch pads. They were the weapon of the first strike: Americans
planned to launch them in event of the nuclear war. They would carry small
nuclear warheads, but since they are so precise they would destroy all
Russian nuclear capability before Russians wake up to use it. With the end
of cold war both sides were left with arsenals of missiles with nuclear
warheads. Old missiles were destroyed, and nuclear warheads are busily
torn apart in both countries. Both Russia and the US kept their most
modern weapons, nevertheless. In the Gulf war the U.S. discovered that
Tomahawks can be used in conventional warfare as well - just take the
nuclear warhead off and put good old TNT on and fire it against any fixed
target on the ground 800 miles away, and it will hit it within two yards
accuracy. Later Tomahawks were used in Afghanistan, Sudan, repeatedly in
Iraq and finally in Yugoslavia. In the third phase of NATO attack on
Yugoslavia, the Pentagon announced how they were running short on
Tomahawks with conventional warheads. In the same time Indian-Pakistan war
heated up and Taiwan president declared that Taiwan would seek UN
recognition. The Taiwan thing pissed of Chinese who did not rule out
military option to keep the Taiwan in their imaginary Chinese realm. Last
time China fired missiles just short of the Taiwan coast, when Taiwan
threatened independency. The U.S. send two aircraft carriers to protect
them. This time China bought 30 Sunburn missiles from Russia - Sunburn is
a top-of-the-line anti- ship weapon that US ships cannot defend themselves
against. So, predictably the Navy said no way we put aircraft carriers as
sitting ducks around Taiwan. Instead the US offered Taiwan Patriot
missiles to defend themselves against possible incoming missile strike. 

You see - those events in spring lead investors to believe that Raytheon
is going to make money, and it perhaps lead Raytheon management to think
that they are in for big money, so they made bloated projections of their
future profits. But what happened is that Congress did not want to approve
Pentagon buying more Tomahawks.. Instead Pentagon was directed to strip the
existing Tomahawks from nuclear warheads (there are still hundreds of
them)  - which obviously are never going to be used anyway - and use them
all but 100 with conventional warheads: this decision saved money, and
pleased immensely Russians and Chinese, who fell silent in the last days
of NATO bombing of Yugoslavia. In other words there was no need to order
new Tomahawks. The pleased Chinese, while still protesting about the
embassy bombing, stopped threatening Taiwan, i.e. the Patriot missile
order was placed on hold as well. Suddenly, Raytheon was left holding the
bag, and it's stock went down faster than the incoming missile (just
recently it plummeted 43%). 

Tomahawks are difficult to sell - even if the US would approve the sale of
that weapon to other countries - only NATO countries, Russia and Chine
would essentially have use of it, since it requires prior possession of
sattelites, submarines and heavy bombers. For example - Milosevic would
not be able to use Tomahawks since he lacks infrastructure for such a
sophisticated weapon. Although, Raytheon did in the past have business
with Yugoslav Army (as well as host of other US defense contractors -
check http://balakansnet.org/yugoslavery.html). 

Taiwan is eventually going to purchase Patriot systems from Raytheon, but
for Raytheon to revive, they'd need a BIG war that would make Pentagon
hungry for new Tomahawks. Iraq and Serbia are spent. Let's look for other
options on the globe: Pakistan just had a military coup - the military was
not happy with having to abandon their war with India when it did not
suited big powers any more, i.e. when China and Russia - Pakistani and
India nuclear patrons - didn't need the diversion crisis anymore, when the
NATO stopped bombing Yugoslavia (Pakistani do have the bomb, though), then
North Korea which might not have the bomb yet, central Africa has lot of
unaddressed wars going on. 

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