Raytheon deal gone, but officials look at positives

Published 8:57 pm Thursday, January 26, 2017

Local officials remained positive Thursday, a day after Raytheon and partner Leonardo announced they had withdrawn from the competition to build an Air Force jet trainer at the Meridian airport, as they were reassured they had done all they could to secure the project.

Raytheon President of Space and Airborne Systems Rick Yuse was emphatic in saying the decision to withdraw did not reflect on the region’s citizens, infrastructure or support for the United States Air Force’s Advanced Pilot Training Program, known as T-X. He applauded the effort of all the national, state and local leaders who had a hand in the effort to land the jet trainer. 

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Yuse wrote in a letter to the editor of The Meridian Star: “…This decision was not easily reached, but it was the right decision for the United States Air Force,” Yuse said. “What I want to make clear is that this exit is not a reflection upon Mississippi. On the contrary, the strength of our Mississippi partnership made the decision extraordinarily difficult. Raytheon received tremendous support from the Meridian community, the Mississippi Development Authority, the State of Mississippi, Gov. (Phil) Bryant, Sen. (Thad) Cochran, Sen. (Roger) Wicker, Rep. Gregg Harper, State Sen. President Pro Tem (Terry) Burton, State House President Pro Tem (Greg) Snowden, business leaders and policy makers as we worked to define the structure of our facility. “

Yuse said Mississippi has all the necessary ingredients to land a substantial military defense contract.

“Mississippi is known for the right blend of infrastructure, proximity to Raytheon customers, government support and a talent base that’s ready for the high-tech jobs critical to Raytheon’s growth, and to our nation’s security,” Yuse wrote. “While this news is disappointing, there will be more opportunities to pursue and work to do together to build upon our legacy of success.”

Efforts to reach East Mississippi Business Development Corp. President and CEO Bill Hannah since Wednesday’s announcement were unsuccessful.

EMBDC Chairman Jeff McCoy, however, was optimistic despite the news that the deal to secure an estimated 450, well-paying jobs was dead.

“We weren’t expecting the news we got yesterday,” McCoy said Thursday afternoon. “We were hoping the next announcement was that the U.S. Government announcing awarding the contract to Raytheon and start building here.”

McCoy looked at the situation as the glass being half full.

“This was an opportunity for us to work together with the Mississippi Development Authority, county, city and airport authority to work on the project with the EMBDC. We did our job, but Raytheon decided to pull out of the proposal,” McCoy said. “I couldn’t be more proud of the people here who put this plan together.

“What came out of this was, we enhanced our relationship with MDA. It was a great amount of time we spent working together on the project with MDA. We laid the groundwork for opportunities that will come,” McCoy said. 

Meridian Airport Authority President Tom Williams said it was a win-win for the area, despite Raytheon’s decision to withdraw its proposal.

“After having 24 hours to digest the news, the fact stands tall that the entire region pulled together and won a major project from a huge company,” Williams said. “This competition helped us build a strong economic development foundation for the entire region. This foundation consists of the relationships that were fostered or grown, the data that was gathered and presented and the broad outreach to anyone and everyone in the community to sell east Mississippi/west Alabama as a great place to do business. We now know that we have what it takes to compete and win. The Mississippi Development Authority knows it, too.  I’m proud of our community and know that the next wins are coming.”

Meridian’s LPK Architects did the renderings for the proposed airport facility.  LPK Principal Architect Bob Luke said the area gave it a good shot.

“It is important for everyone in our community to understand that we did not lose. We did not quit. We are and were part of the team that is no longer in the competition,” Luke said Thursday. “What we did was win. We were selected to be Raytheon’s partner for a new contract with the U.S. Air Force. Today, Raytheon. one of the world’s top defense contractors, knows our community. They know that we have all the elements necessary to provide for the construction of a state-of-the-art manufacturing and assembly facility, a trainable and educable work force that is known for their work ethic, a community and area that offers a quality of life where people desire to live and raise their families. More importantly, a community that came together to be the one and only site Raytheon chose to partner with for this effort.”

Luke said the community is looking for the next venture.

“Today we are not closing the book on this effort; we are simply moving to the next chapter and look forward to other opportunities,” Luke said. “I am so proud of the team of volunteers and our elected leaders that gave so selflessly to create this opportunity. I ask that you look around and see who the real leaders are in our community. They will be the ones that are looking for the positives from this experience.”   

The Air Force put out a request for proposals in January and Raytheon anticipated entering a competition against Lockheed Martin, Boeing and Northrop Grumman.

Though the news was met with much local anticipation, a defense industry analyst with the Teal Group in suburban Washington D.C., Richard Aboulafia, was more subdued about the announcement, saying in October Raytheon’s proposal was a longshot to be accepted.

“Probably the deciding factor was performance,” Aboulafia said Thursday. “Raytheon is barely able to meet the performance requirement. Then the cost of the project comes into play. I think if Raytheon was an aircraft company, that would help with production in order to keep costs down. They could set up an efficient assembly line. I suspect the Raytheon folks had to compete on cost as performance wasn’t there so they had to lower the price. I think that was where things became undone.”

A Raytheon spokesman said the company could not discuss further reasons behind its withdrawal because of an agreement with Leonardo.