RTX wins $23B contract from US Navy to boost Tomahawk missile production

RTX just landed a $22.9 billion contract from the US Navy to massively scale up Tomahawk cruise missile production. The deal represents a seismic shift in how the Pentagon approaches munitions supply chains, moving from peacetime trickle rates to something closer to wartime urgency.

The contract is part of a broader set of five multi-year framework agreements signed between Raytheon and the Department of Defense on February 4. Under the terms, Tomahawk production will jump from approximately 60 units per year for the US military to more than 1,000 annually, covering both Land Attack and Maritime Strike variants.

From trickle to torrent

To put that production jump in perspective: the US has been building roughly one Tomahawk per week. The new agreements call for roughly 20 per week. That is not an incremental improvement. That is a fundamentally different manufacturing operation.

The framework agreements span up to seven years and extend beyond just the Tomahawk. Production of the AMRAAM air-to-air missile is set to reach at least 1,900 units, while SM-6 missile output will climb to over 500 units. SM-3 missile variants, used for ballistic missile defense, will also see production rates increase by two to four times current levels.

Manufacturing will be concentrated across RTX facilities in Tucson, Arizona; Huntsville, Alabama; and Andover, Massachusetts. These sites have already been the focus of a $2.6 billion capital investment program initiated in 2025, laying the groundwork for the infrastructure needed to handle this kind of volume.

The money and the model

Separately, Raytheon also secured a $476.5 million contract modification from the Navy for Tomahawk missile modernization and sustainment. That deal covers recertification, depot maintenance, and spare parts through 2029, ensuring the existing fleet of Tomahawks stays operational while the new production lines spin up.

RTX CEO Chris Calio framed the agreements as a redefinition of how the government and defense industry work together. The contracts align with the administration’s Acquisition Transformation Strategy, which aims to accelerate delivery timelines for critical military technologies by rethinking traditional procurement models.

One notable element of the deal structure is a collaborative funding model designed to protect RTX’s free cash flow while enabling the massive capital expenditures needed to scale production.

RTX indicated that the framework agreements were already factored into its financial outlook for 2026, suggesting the company had been positioning for this outcome for some time.

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