Raytheon moving headquarters to Virginia

Some business leaders say other companies may follow

STATE HOUSE NEWS SERVICE

IN A BLOW to Massachusetts, Waltham-based Raytheon Technologies is moving its global headquarters to Arlington, Virginia.

Raytheon announced its plans Tuesday, saying a headquarters in Virginia “increases agility in supporting US government and commercial aerospace customers and serves to reinforce partnerships that will progress innovative technologies to advance the industry.”

The company, which did not outline impacts on workers here, also called the D.C area a “convenient travel hub” for its customers and employees.

“It won’t be the last headline that we read in that regard,” Massachusetts Taxpayers Foundation President Eileen McAnneny said after the host of a forum on the state budget read a breaking news alert about the company’s plans. Companies are “much more attuned to relative cost differences,” she said.

Raytheon said it had not “accepted or sought” financial incentives from any state or municipality as part of the move, and said it would “maintain its strong US presence, which includes 600 facilities across 44 states and territories.”

The company’s four business units have operations in Virginia, Raytheon said, and its new global headquarters will be in Arlington’s Rosslyn neighborhood alongside the Raytheon Intelligence & Space business.

Raytheon Technologies Corporation’s four businesses are Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. In 2020, the company was formed after Raytheon Company and the United Technologies Corporation aerospace businesses combined their businesses.

The move is coming  two years after the state won out in the merger between Raytheon and United Technologies Corp., with the headquarters remaining in Massachusetts then. ” The Boston Globe He reported that “there would be no reduction in the defense company’s Massachusetts workforce as a result of the move.”

At the Massachusetts Association of Health Plans’ budget forum, association president Lora Pellegrini called the breaking news a “timely message.”

“Raytheon is moving out of the state, and they’re moving to Virginia,” she said. “So I think to your point about us creating an economy, and a place where people want to live and work, and it’s affordable, maybe that is one of the reasons Raytheon is moving. Obviously it’s a huge loss to the Commonwealth.”

“Wow,” McAnneny responded.

McAnneny went on to recall tax policy changes enacted in the 1990s to retain Raytheon, at a time when the Deparment of Defense was doing belt-tightening and the company was exploring a potential move to Arizona and its more favorable tax climate.

“They fought like hell to get a better tax climate in Massachusetts, and they’ve been fighting ever since,” she said. “They’ve been, you know, made to be the monsters … because they asked for this policy. I mean our defense manufacturers were a critically important sector in Massachusetts, a lot of high tech jobs in it. And so that is, it’s troubling.”

Massachusetts High Technology Council President Chris Anderson said Raytheon was following a “decade-long trend” of defense firms establishing headquarters near the Pentagon and called the news “not as alarming as other business leaders suggest.”

“I’d be the first to be concerned about the welcome mat for business eroding and the barriers to exit high cost states like Massachusetts being lower than ever, but this decision doesn’t fit that context,” Anderson emailed, predicting Raytheon investments will remain in Massachusetts even with the loss of a big-name headquarters.

The Massachusetts Fiscal Alliance used the news to draw attention to a constitutional amendment on the November ballot enabling a new 4 percent surtax on household income above $1 million per year, a measure that Democrats in the state Legislature have advanced to raise money for education and transportation.

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The alliance opposes the surtax and said it would push the tax climate here “further into unfriendly territory for businesses and their employees.”

“Raytheon may have considered this move for many reasons, but it’s not lost on us that when the Legislature’s income tax ballot question is months away from appearing on the ballot, a large Massachusetts-based company like Raytheon decides to move its corporate headquarters out of Massachusetts,” alliance spokesman Paul Diego Craney said in a statement. “This could be the first significant canary in the coal mine for Massachusetts and a warning to what will become more common if the Legislature’s 80 percent grad tax hike amendment passes this November.”