Raytheon, an RTX business, has received a seven-year contract valued at $22.9 billion to increase production of Tomahawk cruise missiles for the US Navy and allied customers.
Announced on 17 August 2026, the agreement is intended to support a substantial expansion in annual output. Raytheon said the production plan will take Tomahawk capacity to more than 1,000 missiles a year, alongside associated sustainment and support activity.
Production capacity rises
The contract represents a major shift from short-term munitions procurement towards longer production planning. Multi-year agreements can give manufacturers and their suppliers greater visibility over demand, allowing investment in facilities, equipment, workforce and component capacity to be planned against a more predictable order profile.
RTX said it has already been investing to increase Tomahawk output and reported that it delivered three times as many missiles in the first half of 2026 as it did during the same period in 2025. The new contract is expected to support further expansion across Raytheon’s manufacturing operations and the hundreds of small and medium-sized suppliers involved in the programme.
Tomahawk remains a long-range precision-strike capability used from maritime launch platforms. Raytheon said the weapon continues to provide the US Navy with a means of engaging targets at extended range while reducing the need to position crewed platforms close to heavily defended areas.
Supply chain becomes central
The scale of the agreement also highlights the industrial challenge accompanying higher defence demand. Increasing missile inventories is not simply a matter of increasing final assembly rates. Propulsion, guidance, electronics, energetic materials and specialist components must all be available in sufficient quantities and on compatible production schedules.
Raytheon President Phil Jasper said the company is investing in its workforce, technology, supply chain and facilities to meet increased demand. The seven-year structure gives those investments a longer planning horizon than a succession of smaller annual orders.
It also reflects a broader move towards using long-term procurement to support industrial readiness as well as immediate operational requirements.
For defence procurement teams, the contract is therefore significant beyond the Tomahawk programme itself. Governments are increasingly examining how quickly industrial capacity can respond to sustained demand, particularly for precision weapons dependent on complex supply chains. The Raytheon agreement provides a clear example of procurement being used not only to acquire missiles, but also to establish the production capacity required to replenish and expand inventories over a prolonged period.
