By the end of 1999, Raytheon — the third largest defense contractor in the United States — will increase employment at Raytheon Systems Company, its Portsmouth, Rhode Island facility by as many as 600 employees. And there is talk that more jobs could be on the way.
That’s good news for small businesses in town and throughout Aquidneck Island that just a few years ago were bracing for the fallout of further cutbacks in the defense industry.
While Newport County relishes its tourism dollars, that business — as large and lucrative as it is — remains seasonal. Portsmouth Town Administrator Robert G. Driscoll said that when Raytheon cut jobs in the past, “a certain sense of vitality went with them.”
The defense contractor’s decision this fall to add jobs in Rhode Island, said Driscoll, comes as welcome news.
“We’re very concerned that Raytheon remain an economic center for Portsmouth,” said Driscoll. “From November through March, businesses here rely on the locals. There’s a lot of spin-off for the small businesses.”
Glenn Allen, who owns Allen’s Wine & Spirits on East Main Road in Portsmouth, is a former president of the Portsmouth Business Association. Allen’s business is about four miles from the Raytheon facility.
“More jobs means more people in town spending money,” said Allen. “People add to the flavor and character of the community and the economic growth of the town.”
David Costa, who owns Sportswear Etc., an off-price men’s and women’s clothing store on East Main Road, counts Raytheon workers among his customers.
“This can’t hurt,” said Costa. “I definitely get customers from there — they stop by at lunch.”
Raytheon Systems Company was established in January of this year as part of the consolidation of four companies: Raytheon Electronic Systems Division; Texas Instruments Defense and Electronics; Hughes Aircraft; and E Systems. The creation of Raytheon Systems Company is part of Raytheon’s overall attempt to consolidate. The company now plans to reduce employment by 12 percent by the end of this year and another 4 percent in 1999, or about 14,000 positions over a two-year period.
Meeting goals
“We are well down the path to meet the restructuring and consolidation goals we announced last January,” said William H. Swanson, Raytheon Systems Company’s chairman and chief executive officer.
In some locations, those efforts to consolidate will be painful, while in others, such as in Portsmouth, and Andover, Mass., they will represent dramatic growth. Among the significant changes planned by the defense industry giant are:
- The Lewisville, Texas, facility will close by the end of 1999.
- The Strike Systems Business Unit will relocate to Tuscon, Ariz., and the Circuit Card Assembly (CCA) work will be consolidated with the CCA work in Andover, Mass.
- The Naval and Maritime facility at Kukilteo, Wash., will close by the end of 1999, with the work being consolidated in Rhode Island.
- The Orangeburg, S.C., plant will close by the end of 1999, and the work will be relocated to Andover, Mass., and the plant in Forest, Miss.
- The Waltham (Mass.) West facility will be closed by the end of 1999, and the work will be transferred to Andover and Tewksbury, Mass.
- The Farmers Branch and Irving, Texas, facilities will be consolidated into the Arlington, Texas, facility.
- The Information, Intelligence and Aircraft Integration Systems headquarters building in Garland, Texas, will be closed and the workforce consolidated in another building in Garland.
- The San Jose, Calif. facility will be close and the work transferred to State College, Penn., in 1999.
Dave Shea, a spokesman for Raytheon Systems Company, said the Portsmouth facility fared well in the consolidation plans for several reasons, including its proximity to the Naval Undersea Warfare Center (NUWC), and that it is comparatively close to Washington, D.C. The Portsmouth facility beat out facilities in Fullerton, Calif., and Kukilteo, Wash.
“It wasn’t a difficult decision,” said Shea. “We needed to find a central location for our Naval and Maritime Systems work. It made sense to get like organizations in one place.”
A 175-acre facility
In Portsmouth, Raytheon Systems Company has a 175-acre facility, previously called Raytheon Electronic Systems. The company has more than 85 years experience in sonar development and has produced more than 350 systems. More than a dozen of Raytheon’s variable-depth sonar systems are in service or under contract throughout the world.
According to background information provided by Raytheon, the Portsmouth site is “one of the finest commercial acoustic test facilities in the world.” The computer-aided design laboratories are regarded as among the very best in the country. And the scientific computer facilities provide access to the widest range of computer hardware and technology, according to the company.
At the end of 1997, according to Raytheon, nearly 1,000 people were employed at the Portsmouth facility. One-third of those employees are engineers or scientists. Many, according to the company, hold advanced degrees and are internationally recognized for their work in the field of underwater acoustics.
It is a company followed closely by Rhode Island’s Congressional delegation, whose members must keep a keen eye on proposals to cut defense spending and the impact such federal cutbacks can have back home. Both U.S. Sen. John Chafee and Congressman Patrick J. Kennedy lauded Raytheon’s decision to add to its Portsmouth workforce.
Escaped Downsizing
“This is the second time in less than a year that Raytheon’s Portsmouth facility has escaped a major downsizing at Raytheon,” said Chafee. “It is a tribute to Raytheon’s management team there and every one of its workers that this expansion is taking place. And, needless to say, it is great news for Aquidneck Island’s economic base, its community, and all of its small businesses.”
Kennedy said the decision by Raytheon to expand in Rhode Island “underscores the commitment the company made in January when it announced that the Portsmouth facility would become the primary location for Naval and Maritime Systems.”
“As the Naval Undersea Warfare Center continues to expand its presence on Aquidneck Island, it bodes well for the future of defense contractors such as Raytheon,” said Kennedy.
Good for Real Estate
The expansion of jobs at the Portsmouth facility is expected to boost an already healthy real estate market. Town services will be tapped, but Driscoll said the town will work hard to incorporate the needs new families will bring.
“We have about a quarter of their workforce living here in Portsmouth now, and certainly the rest of them living nearby,” said Driscoll. “We’re going through a period of fairly rapid growth.”
Allen, who is active in local politics and has lived in town for many years, does not see an increase in population as a problem.
“We have great services and a great school system,” he said. “I think our police and fire and schools can handle it.”
The success of Raytheon’s Portsmouth facility gives town officials a selling tool in attempts to recruit other high-technology companies to Aquidneck Island. “This gives us something to build on,” Driscoll said.
