Raytheon CEO Gregory Hayes: How Ukraine Has Highlighted Gaps in US Defense Technologies

**Adi Ignatius** (0:16)
Welcome to The New World of Work. I'm Adi Ignatius, Editor-in-Chief of Harvard Business Review.
And each week on this show, we talk about the changing world of business in these challenging times. We have a great guest today, although before I introduce him, let's hear from our friends at Unisys.

**SPEAKER_1** (0:33)
Your employees went from working in one place to working in so many places.
Our digital workplace solutions can help them all create and collaborate seamlessly. We're at Unisys and we do digital workplace solutions really well.

**Adi Ignatius** (0:50)
All right. Thank you all again for joining us.
Our guest today is Gregory Hayes, the CEO and Chairman of Raytheon Technologies, the aerospace and defense giant. Greg was originally a trained accountant and served for six years as CEO and Chairman of United Technologies. When that company merged in 2020 with Raytheon, Greg became CEO of the combined entity. Welcome, Greg.

**Gregory Hayes** (1:14)
Good afternoon. Hello, everyone.

**Adi Ignatius** (1:17)
I appreciate you being here and there's a lot of things I want to talk about, but I probably make sense to talk about what's happening in the world and given that you're in part of the defense company, what's happening in Ukraine. Tell us, what does it mean to be running to the defense company at a time when the whole world is fixated on this war?

**Gregory Hayes** (1:39)
It's an interesting time in which we live, and I would tell you that while we are a defense company, our goal is to provide our country and our allies with the most effective systems, weapons systems, defensive systems, to try and prevent just such a conflict that we're seeing in Ukraine. Nobody actually wins in a war. You might gain territory or whatever, but the fact is the idea of having strong defense and providing this high technology is to try and prevent something like this from ever happening.
When bad things do happen, like Putin's invasion of Ukraine, it's great to see that we have weapons and systems that can help in the fight for democracy. And I think that's what keeps our people coming to work every day, this singular mission around defending democracy and connecting the world.

**Adi Ignatius** (2:30)
Well, I appreciate that. And if you're watching this, you have questions of your own for Gregory Hayes. Please put them into the comments. We'll try to get to some audience questions later.
You made some public comments a while back about how the conflict would likely result in an increase in your business. Some took issue with that. That seems like a logical consequence of what's going on, right?

**Gregory Hayes** (2:54)
Yeah, it's fair enough. Look, we don't apologize for making these systems, making these weapons. The fact is they are incredibly effective in deterring and dealing with the threat that the Ukrainians are seeing today.
The Javelin anti-tank weapon system is a modern marvel. It can take out a main battle tank from two and a half miles away. The Stinger anti-aircraft missile, which frankly has been around since the late 70s, is incredibly effective in targeting low-flying aircraft, helicopters, and even jets and other missiles coming in at less than 10,000 feet. So I make no apology for that. I think, again, recognizing we are there to defend democracy. And the fact is, eventually, we will see some benefit in the business over time. Everything that's being shipped into Ukraine today, of course, is coming out of stockpiles, either at DOD or from our NATO allies. And that's all great news. Eventually, we'll have to replenish it. And we will see a benefit to the business over the next coming years. We don't make a huge margin on these products. This is all cost-based pricing. But again, the idea here is to make sure that you have the capabilities to deal with whatever threat might be out there. And that has been the mission of Raytheon Technologies since our inception.
And Adi, please call me Greg, not Gregory. Only my mother and father still call me Gregory.

**Adi Ignatius** (4:23)
All right, I appreciate that. Well, Adi is my nickname, so let's go with that too. So I'm interested in how a company like Raytheon Technologies thinks about ESG, environmental social governance, for those who don't play around with that acronym.
Investors increasingly look at ESG ratings for companies as part of their assessment of their investment worthiness. I would imagine some of the rating companies are not particularly generous in their evaluations, given the business you're in. So I guess my question is, do ESG raters get your company?

**Gregory Hayes** (5:00)
I think for the most part they do. I think again, it's the story that we need to be telling. As a defense contractor, there are certain investors that just don't invest in us.