Raytheon to Partner With Thales in Upgrading TOW Missiles

TOW missiles help to make missile systems Raytheon's biggest business.

Jun 16, 2014 at 4:39PM

Raytheon (NYSE:RTN) is giving one of its marquee weapons systems a makeover.

Announcing a partnership with European defense contractor Thales on Monday, Raytheon says it and its partner will invest millions of dollars and at least 27 months of work into improving the functionality of Raytheon's TOW weapons system. The companies will also cooperate in manufacturing the missiles for their customers over the course of a five-year production agreement.

Raytheon's TOW missile. Photo: Wikimedia Commons.

Last year, Raytheon made headlines with a deal to export 15,699 TOW missiles for use by the Royal Saudi Land Force in Saudi Arabia.

Short for "Tube-launched, Optically tracked, Wireless-guided," the TOW missile is one of Raytheon's most famous weapons systems -- and one of its most popular with buyers both in the U.S. and abroad. The TOW was designed as an anti-tank weapon. Until its advent, such weapons usually fell into one of two categories: (1) "fire and forget" missiles that were not guided, but aimed and fired -- and hopefully hit their target or (2) attached to a wire, and guided via that wire toward their target.

The optically guided TOW needs no wire, yet as a guided missile, it is more accurate than its unguided forebears. In a statement, Raytheon noted that the missile gives its buyers "affordable precision" in their anti-tank weapons. In addition to addressing (unspecified) "obsolescence issues" with the missile, Raytheon said it will be working with Thales to incorporate "cost saving technologies" into the TOW. Raytheon says it has delivered more than 675,000 TOW missiles to U.S. and allied warfighters.

According to Monday's press release, Thale has committed roughly $20 million.

Although not the company's most profitable division, Raytheon's Missile Systems unit, which makes the missiles, accounted for 27.8% of sales booked last year. This makes it the company's largest division by revenues.

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