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Raytheon Awarded $2B Missile Contract After Board Member Lloyd Austin Becomes Biden’s Defense Secretary

Raytheon Awarded $2B Missile Contract After Board Member Lloyd Austin Becomes Biden’s Defense Secretary

Raytheon

Defense Secretary Lloyd Austin speaks during a briefing at the Pentagon in Washington, Thursday, May 6, 2021. (AP Photo/Susan Walsh)

Defense weapons manufacturer Raytheon Technologies Corp., for whom Defense Secretary Lloyd Austin served as a board member until earlier this year, has been awarded a contract worth as much as $2 billion to develop a new nuclear cruise missile.

The deal is the first major Biden administration move to replace the country’s aging nuclear arsenal, the Pentagon said in a statement.

The Air Force is expected to buy up to 1,000 long-range standoff weapons to replace the air-launched cruise missile first fielded in 1982, Bloomberg reported. 

Some are questioning the timing of the contract. Austin, the first Black Pentagon chief, had been a Raytheon board member since April 2020 — one of the reasons there was initial pushback to his nomination in January. 

Austin promised to recuse himself from matters involving Raytheon Technologies, one of the largest U.S. defense contractors.

After President Joe Biden nominated Austin, it was reported that Austin could get as much as $1.7 million in payments tied to his Raytheon board seat.

“As soon as practicable but not later than 90 days after my confirmation, I will divest my financial interest in Raytheon,” Austin wrote in his ethics agreement with the Pentagon and his financial disclosure report, which was released Sunday by the Office of Government Ethics. He also pledged to recuse himself for one year from decisions involving Raytheon, Forbes reported.


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After a 41-year military career, Austin retired in 2016 as the chief of the U.S. Central Command, overseeing military operations in the Middle East. In September 2016, Austin joined the board of United Technologies Corporation, which merged with Raytheon in April 2020. Austin stayed on as a director of the joint company, earning $643,000 in cash in five years, according to an analysis of Securities and Exchange Commission filings. He also received equity awards ultimately worth an estimated $1.1 million, Forbes reported.  

Forbes estimates Austin’s net worth at $7 million.

This latest contract with Raytheon follows a $3.1-billion deal the company signed with the Air Force on June 9 for a radar system, Boston Business Journal reported.

In 2020, Raytheon raked in $11.6 billion in defense and missile revenue, behind its aerospace division but ahead of intelligence and space.