RTX Exits the Space Prime Business, Won’t Make SDA Satellites (Image Credit: airandspaceforces)
RTX will no longer compete to be a prime contractor in the space field, focusing instead on its “strengths” as a supplier of payloads, sensors, and components to other companies, president and chief operating officer Chris Calio said during the company’s April 23 earnings call.
Calio said RTX will “pivot” from “a space prime, if you will, to being more of a component supplier to the space primes. And I think, when you look at our strengths in that portfolio, I think that pivot … is the right one.”
RTX has “historical strength in some of the exquisite space areas,” but has “other strengths in some of the key components that go into the prime satellites and buses. But again, I think that’s where we’re going to be shifting; away from perhaps being a space prime to being more of a component supplier.”
Calio will succeed Greg Hayes as chairman and chief executive officer of RTX in May.
In March, RTX pulled out of a fixed-price, $250 million agreement to build seven missile tracking satellites for the Space Development Agency after realizing it couldn’t break even on the deal. The SDA is deleting those seven satellites from the planned constellation, director Derek Tournear told reporters at the Space Symposium March 18. The 28 other satellites—14 each awarded to L3Harris and Northrop Grumman for Tracking Layer Tranche 1—will suffice, he said. RTX-made components will fly on the L3Harris and Northrop birds, he added.
Even before it received the award, though, RTX was moving to exit the space prime role. Last April, David Broadbent, then-president of Raytheon’s space sector, told SpaceNews that “being in a mission prime position hasn’t yielded the results that we were looking for, and we’re now focused on a merchant strategy.”
RTX lost about $28 million on classified programs in the first quarter, Calio said. The company would not characterize the sectors those programs affected.
“There’s a few of them,” he said, and he estimated “it’s about 12 to 18 months” before those losses abate, with “critical milestones on each program.”
“There’s still some headwinds that we’re encountering as we get additional technical learning and going through testing, but that’s the timeframe and that’s the magnitude I would put on it,” he added. The company will “battle through” the losses.
