Raytheon more than doubled output across its critical munitions programs in the first half of 2026 from a year earlier. Production of the Coyote counter-UAS effector also more than doubled amid strong demand, Calio said during RTX’s second-quarter earnings call.
The next increase will require more capacity from suppliers. RTX is investing in supply-chain resilience and adding second and third sources in areas where production remains constrained, according to Calio.
The company is also looking outside the traditional defense industrial base for additional manufacturers. Calio said some companies could bring capabilities needed to support higher production rates.
RTX has started making some investments before expected new munitions demand is converted into firm orders. The company is working with suppliers on projected volumes, capacity requirements and the spending needed to support those production levels.
Long-term contracts will be important to further industrial expansion, Calio said. A seven-year firm order could give suppliers enough visibility to buy tooling and test equipment and hire workers before production rates increase.
“If you can go out and give a supplier or a set of suppliers a seven-year firm order, they will lean forward; they will make the investment,” Calio said. He said suppliers need that level of commitment before making investments required for higher output.
RTX is also putting capital into specific production and testing capabilities. Raytheon is investing an additional $100 million in the United States to increase JMT component production and accelerate LTAMDS test capabilities, Calio said.
Chief Financial Officer Neil Mitchill said RTX can invest in new capacity for existing products while continuing to fund development of new products. The company is also building inventory to support the production ramp in the second half of 2026 and growth expected in early 2027.
Manufacturing investment also includes RTX’s connected-factory network. Calio said the network now covers more than 30 million annual manufacturing hours on the company’s proprietary data and AI platform, up 30% since the end of 2025.
Calio said the system is helping RTX shorten cycle times, improve quality and make faster production decisions. He said investment in capacity and a healthy supply chain will remain a capital-allocation priority as demand grows.
