A Syria strike would almost certainly boost orders for Tomahawk missiles. | REUTERS Syria hit could up Raytheon payday

A U.S. attack on Syria could translate into big bucks for defense giant Raytheon, which makes the Tomahawk cruise missile that’s said to be President Barack Obama’s weapon of choice.

Reports that the White House is planning an attack to punish Damascus for the use of chemical weapons sent Raytheon’s stock price to a 52-week high this week — and have reawakened grumblings in Congress that the military doesn’t buy enough Tomahawks.


“There are many of us who have been concerned for years about maintaining our missile capabilities,” said Rep. Rob Bishop (R-Utah), a member of the House Armed Services Committee.

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On paper, the Pentagon buys 196 Tomahawk missiles a year, considered the “minimum sustaining rate,” or just enough to maintain the supply chain. But the Navy, which did not respond to a request for comment, has had to ramp up production after firing hundreds of Tomahawks during Libya’s 2011 civil war.

Accounting for the extra orders, Raytheon has delivered 252 missiles this fiscal year and 361 last fiscal year. And any Tomahawks fired at Syria would almost certainly represent a future increase in orders for the missiles, which can go for about $1 million apiece.

“There’s a number that has to be available,” said one defense lobbyist. “If they fall below that number, they’ll replace them.”

Bishop is worried about the fledgling supply chain for solid rocket motors, with guided missile programs bringing a lot of money to his district. Demand for the motors that are used to launch Tomahawk missiles from warships and submarines has fallen in recent years because of cuts to U.S. space and missile programs.

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For Raytheon, the big question is whether a starring role for the Tomahawk in Syria will lead to a permanent increase in orders for the missiles, which have become a go-to weapon in recent conflicts because of their ability to penetrate sophisticated air-defense systems without risking U.S. lives.

“Cruise missiles are heavily used, particularly so often at the start of any conflict, as sort of the way to open the door,” Bishop said. “When you reduce funding or diminish demand in many of these programs, you really endanger the capability to maintain this missile capability at all.”

In its budget submission for fiscal 2013, the White House requested 196 Tomahawks, for a total program cost of $320 million. It’s requesting the same amount next fiscal year, for a cost of $325 million. The increase in price, defense watchers say, is the result of several factors: inflation, rising fuel costs and a shrinking supply chain.

The Navy has also bought extra missiles to replenish its inventories following the civil war in Libya, awarding Raytheon two Tomahawk contracts last year — one for 361 missiles and the other for 252, with the work for the second contract expected to be completed by August 2015.

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The increased orders were a boon for Raytheon, which saw an increase in net Tomahawk sales of $32 million during the second quarter of the year, compared with the same period last year, according to its latest filings with the Securities and Exchange Commission.

Any Tomahawks used in Syria would likely represent another increase in future sales, raising an obvious question: Where would a cash-strapped Pentagon get the money to replace Tomahawks used to punish Damascus?

Probably from its base budget, the lobbyist said, or from accounts intended to pay for the war in Afghanistan.

“Otherwise, they’ll have to address it in their upcoming budget request,” the lobbyist added, saying there’s little chance Congress would pass a supplemental spending bill for operations in Syria. Pentagon leaders had said earlier a Syria intervention might force them to request more money from Congress.

The lack of supplemental funding is causing frustration among lawmakers worried the costs of an intervention in Syria could exacerbate the Pentagon’s fiscal woes. “Our military has no money left,” said Oklahoma Sen. Jim Inhofe, the ranking Republican on the Senate Armed Services Committee.

On Wednesday, Inhofe announced he’s opposed to military operations in Syria — a major setback for the Obama administration as it works to drum up support among key members of Congress for a response to the reported use of chemical weapons by Syrian President Bashar Assad.

“We can’t simply launch a few missiles and hope for the best,” Inhofe said.

Regardless, the administration appears to be moving forward with plans to attack Syria as early as Thursday. The Navy has four guided-missile destroyers in the Mediterranean, with a fifth on the way, each armed with Tomahawks.

The missiles, which can be launched from both surface warships and submarines, have a range of more than 1,000 nautical miles. The latest version, Block IV, has a satellite link that allows it to loiter over the battlefield as it awaits target instructions.

And in Washington, they’re quickly becoming a symbol for defense advocates worried that cuts in military spending will leave the country ill-prepared for future conflicts.

“It’s not like there are huge stockpiles of Tomahawks lying around in a warehouse somewhere,” said a congressional defense source, who asked not to be identified in order to discuss the issue candidly.

“We have one hot production line that operates at a steady, but modest, capacity out in Arizona,” the source said. “When we use 50, 100, 150 of these it can create near-to-medium-term shortfalls that may cascade and affect our conventional strike capacity in other theaters.”

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