Raytheon CEO talks about what merger with UTC means for Mass.
Many questions remain about the United Technologies-Raytheon merger, which the aerospace giants announced Sunday. But Raytheon’s chief executive, Tom Kennedy, says he is bullish on what it means for employment, overall and in Massachusetts.
United Technologies Corp.’s chief executive, Greg Hayes, will take over as CEO after the merger closes next year, and Kennedy will remain with the company as executive chairman for two years. The top management of the newly formed Raytheon Technologies will be headquartered in the Boston area, not in UTC’s home base of Connecticut.
By coincidence, Kennedy appeared in front of Boston business leaders Tuesday at the Boston Harbor Hotel, but it wasn’t to talk about the deal. Kennedy had previously been scheduled to participate in a Boston College Chief Executives Club luncheon, at which he interviewed General Dynamics CEO Phebe Novakovic.
In an e-mail exchange with the Globe, however, Kennedy said it’s too early to determine whether the future home of the company will be at Raytheon’s current headquarters in Waltham or somewhere else in Greater Boston. About 400 employees work at Raytheon’s headquarters today, a small percentage of its nearly 13,000 Massachusetts employees.
“We’ll be assigning teams to work all aspects of the merger,” Kennedy said. “When we have more to share, we will.”
Kennedy cited the “tremendous amount of talent in Massachusetts” as a main reason for putting the headquarters of the combined company here.
“We’re always looking to hire top engineering talent, and we know that some of the best go to school here,” he said. “The company was born a stone’s throw from MIT almost 100 years ago. Our roots are here.”
Kennedy declined to say how many jobs will move to the Boston area from Connecticut, although Connecticut Governor Ned Lamont has said it will be about 100.
Corporate mergers often raise concerns about layoffs and plant closings, but Hayes and Kennedy sought to tamp down those fears in a conference call with analysts Monday. They noted there is little overlap between the companies’ products and services. There will probably be job cuts, but the CEOs said they’ll find other ways to make up much of the promised $1 billion in eventual annual savings.
On that call, Kennedy said Raytheon plans to hire 10,000 people this year across all its locations. The company employed about 67,000 people as of Dec. 31. Of the 10,000 hires this year, 7,000 will fill vacancies and 3,000 will be for new positions, a spokesman said.
Raytheon expects close to 20 percent of its hires this year to be in Massachusetts, or about 2,000, based on its previous history. Raytheon has already hired 1,100 toward that goal.
Kennedy said the merger was initially his idea. He reached out to Hayes last summer after he learned his counterpart was interested in spinning off UTC’s Carrier heating-and-cooling division and its Otis elevator division. After those spinoffs are complete, Kennedy said, Raytheon and UTC will have businesses that complement each other. The companies began working in earnest on the merger in January, he said.
“While UTC was stronger in aerospace, Raytheon was stronger in defense,” Kennedy said. “I can’t remember the last time we competed against Greg and his team. That’s why our fit is so ideal.”