Philip Phalon
Raytheon, Vice President Corporate Marketing
106 Bristers Hill Road
Age 66
Interviewed April 11, 1996
Concord Oral History Program
Renee Garrelick, Interviewer.
Science and Technology Segment
My career with Raytheon started in 1956. That was just a couple of years after I got out of the Army having been in the Korean conflict and worked for a couple of a years for a company who made Arrow shirts. Having just gotten married and starting a family, that company wanted me to move to Grand Rapids, Michigan and that was just not in cards to do that. In those days I had just bought one of those no money down VA homes, a tract home, in Burlington for $12,500. In those days you had to give them $20 on the day you decided to buy the house, but when you passed papers, you got that $20 back and you got a 4% mortgage, so those were pretty good days for people starting out. A friend of mine suggested going to the Raytheon Company in Lowell, a plant that Raytheon has just purchased. It had been previously operated during World War II and during the Korean War by two companies, Remington Arms who made rifles and Davis Aircraft who had rebuilt airplane engines there. Then Raytheon bought that plant because they needed a facility to continue the development of the Sparrow-3 missile, which was a very new concept at the time.
The State Department of Unemployment actually ran the Raytheon Company personnel office up there and after I besieged them for a couple of weeks, they finally hired me on as a junior accountant. It was a job I was forever grateful for because I was just about to run out of places where I could find the money to pay the mortgage. Anyway that started my career at Raytheon Company and in those days, we were just at the brink, you might say, or the edge of what later became the technological revolution. Radar, which was a concept that had been developed during World War II, was still pretty primitive by today's standards. Certainly things were big and bulky, the great advent of semi-conductors and all the things that have been made miniaturized products during the technological revolution that we've had the last several years, just hadn't come on the scene yet. The name of the game was to make these big and bulky things faster and to make them smaller, make them lighter, and to make them capable of doing more things. People were aware in those days of what the possibilities were for but they didn't know how to get from here to there yet.
In any event, fortunately for me there was a great think tank at Raytheon Company that had developed this new concept for air defense missiles. The concept was called CW semi-active radar. This was a concept which was considered quite new using the Doppler effect to guide missiles as opposed to just riding a beam in as older missiles had been want to do. This concept, which had been originated in what Raytheon at the time in the early 1950s called lab 16, was put into the prototype phase, and it was then funded. In the case of the Hawk missile, which is the same radar concept but bigger, it was for surface to air defense. That was being procured by the Army. The Navy was procuring the Sparrow 3 missile which was used as an air-to-air intercept defense missile. It was for purposes of producing the Sparrow 3 missile that Raytheon Company purchased the Lowell plant. I was fortunate to be one of the first 100 employees up there. That plant grew to be 3,000 or 4,000 in number. Of course, the Andover plant where the Hawk missile was built later became a plant of 6,000 people. Here was a point in time where Raytheon Company was becoming, even then, a very important part of the Massachusetts economy. We were not the biggest employer at that time. Usually on an annual basis, General Electric was because their plants in Lynn came out ahead of us. In time Raytheon eclipsed General Electric and became the biggest employer in Massachusetts.
There was also an interdependency between government and science and engineering at that time. Very interestingly, the center of aircraft technology and missile technology really resided on the West Coast. The big aircraft companies were the ones that were originally engaged in most of those efforts, but you might have thought some of these things that Raytheon did would more properly have been found in one of those locations, like the Southwest in Arizona or southern California or perhaps up around the Silicon Valley of California.
At the time Raytheon Company was led by one of the finest people I think I have even known in my life, a gentleman named Charles Francis Adams. He had been engaged in the financial world of New York City prior to World War II, did a Navy service as a ship commander and returned then to J.P. Morgan Company, I believe, as one of their senior people. At the time it is my understanding that a piece of Raytheon was owned by this investment company, and they didn't like the way things were going after World War II in that of course the company was retracting quite dramatically from its very fine experience during the war with radar and sonar. So they sent Charles Francis Adams back to Boston, which was his home town to become a member of the Board and then later Chairman of the Board of Raytheon Company. One interesting anecdote Mr. Adams was kind enough to share with me was that in his boyhood, he actually grew up on Fairhaven Bay on the other side of Route 2 in Concord, and his family had a home there which all the Adams boys enjoyed during the summer time. His father was Secretary of the Navy back in the World War I time frame. Of course, if you go far enough, his great-great-grandfather was John Quincy Adams and John Adams before that, so the Adams family had a long and noble experience in New England and more specifically in Boston.
Well, as they say, Charles Adams was a man who had great vision. He, I think you have to say, alone determined that the future of Raytheon Company had to be assured by something more than simply the technical talent of its employees, so he created a great alliance between Raytheon Company and the major universities in the Boston area specifically MIT, Northeastern, Boston University, all the great houses of technology. Utilizing that alliance, he was able to introduce into Raytheon Company a tremendous technology and that gave rise in some measure to the exponential growth of Raytheon Company from the advent of Mr. Adams, which was about 1948, 1949 and through the 1950s -- all this prototyping of new technology that was coming on the scene at the time. For myself I was very fortunate to be able to get involved in that in the early times.
The company had great leadership specifically under Mr. Adams, but as time went on and as Mr. Adams elected to withdraw a little bit from the active day to day management of the Company, he did attempt to introduce at the most senior level, at the presidency level, just below the Chairman of the Board level which was a position he retained, various gentlemen from different walks of life to try to lead Raytheon. The people who came mostly from non-New England backgrounds never quite fit the culture of the Company which had been established during Mr. Adams' long and happy tenure in the Chairmanship and Presidency of the Company. People like Harold Geneen came and went and he went on to become very famous as the Chairman of IT&T. We had a gentlemen named Richard Krafve who had come from Ford Motor Company. These people came but after a year or two, none of them seemed to be able to fit the culture of the company that had been established by Mr. Adams. There was a point, and I would guess it was about 1965, when it was determined by Mr. Adams and the rest of the Board that leadership of Raytheon Company should come from within. They reached down into what at the time I believe was called Missile and Space Division to one of the gentlemen who had come out of Lab 16, that I earlier mentioned, who was in various circles sometimes known as Mr. Hawk, because he was so central to the development of the Hawk and Sparrow missiles, and his name was Thomas L. Phillips. Tom Phillips was elevated to the presidency and later on to the Chairmanship. Mr. Adams remained on the Board and does to this day. Tom Phillips then introduced into the Company another gentleman named D. Brainerd Holmes. Mr. Phillips took on the Chairmanship of the Company and Mr. Holmes after a stint as Vice President in our Space Division became President of the Company.
From that point on, the Company grew by leaps and bounds. For one reason, the central government business grew very, very handily, and in addition, I'm sure with the blessing of the Board of Raytheon, Mr. Phillips determined that we were too dependent upon the defense business and embarked on an acquisition process which lasted over 10 or 12 years. We acquired for instance, Amana Refrigeration, Caloric Stoves and they became the basis for what today is a large segment of Raytheon, home appliances. In addition to that, he acquired Badger Company in Cambridge and United Engineers in Philadelphia and other engineering and construction companies, and that today is Raytheon's Engineering and Construction Division, a big element of the company. Badger was in petrochemical plant design and construction. Of course, they acquired largely through Mr. Holmes' efforts, who was quite a pilot himself, Beech Aircraft Company. Beech later acquired Sidley and Hawker Aircraft out of England and so it has become a very large commercial operation - the Raytheon Aircraft business.
So these various things have helped over the years. I think Mr. Phillips' judgment over the years has been proven correct, in that the company is today a much more highly diversified company. It has tentacles in four or five different areas which are all commercial and I can't give you as of this moment, the particular percentage of what the defense business is versus the commercial business, but in my better days at Raytheon in the early ‘80s, we were probably something like 65% defense and 35% commercial. I would guess just from reading the paper a lot that that percentage has reversed itself now. Under the leadership of the present CEO, a Concordian named Denis Picard, they have successfully, I think, taken care of this transition from what the world was like during the cold war, which was all the time that I was with Raytheon, and now the restructuring and downsizing of the defense business.
In 1966 Raytheon acquired D.C. Heath Publishing Company, but that particular portion of the company has now been sold off under the present management. It was not considered essential to their core business during the restructuring. D.C. Heath was where all the other little elements of the education business were integrated into, so when they sold the education portion, they just sold D.C. Heath.
But you know, it was a tremendously interesting time frame. I look back over my life and I wouldn't have wanted to live at any other time but right now because this past century has been a century of fantastic history. We needed always to keep updating our equipment. One of the reasons Raytheon Company stayed in the forefront of the defense business and to give you some idea, we were back in the ‘80s probably the sixth largest defense company in the country, and the ones that were bigger were just the big oil companies like Exxon that sold all the petroleum and what they called POL to the services and the big aircraft companies. So we were the biggest defense and electronics company in the business. One of the reasons we stayed big was because we constantly updated our equipment. We were never satisfied with the technical capability of a piece of equipment, and neither were the services because in the cold war days, always there was the potential of an increased Communist or Russian threat. They started out making MIG 19s and then of course on the drawing boards, we knew they had MIG 21s and then they had MIG 23s and then 25s and 27s. Each of these aircraft had more and more capability. They could fly higher, they could fly faster, they could carry more armament, whatever you wanted to say about them. Constantly there was the need to increase the capability of our equipment. We went from the draft type Army into an all volunteer Army. This had the services very much concerned and they saw the need even then for decreasing the dependence of weapons on human beings to maintain them. So you would look at say a Hawk battery of the 1960s and maybe you'd have 11 people trying to maintain it and fire it. Now you have a Patriot battery out there and now it's just two people doing more. It was driven by the potential threat that we had. That's what drove the services to constantly tell the companies like Raytheon, you have to do better, you have to do maintainability, more reliability, more quality control and your systems have to be able to go faster, higher, everything. All the criteria just kept getting bigger and bigger. Well, Raytheon was in the forefront of that need of constantly upgrading the equipment.
Going back now to my own career, after a couple of years at this accounting job at the Lowell plant, I was given the first promotion I had which was as an administrative assistant to the plant manager, which was a great educational experience because carrying his bags got me into meetings and I saw how these guys operate. You find out how much different the upper echelon is and what they are concerned about besides what us little guys on the floor were concerned about. I tried to remember that all my life and tried to say "Don't forget what those little guys on the floor are worried about out there" when you're all hung up in your own responsibilities.
From there I got put into what they called contract negotiation. That was a set of circumstances because of the growth of the company. I was very fortunate because all my life at Raytheon Company, I had such wonderful people to work for. Wonderful people in the sense that they were patient in teaching you your new job, giving you goals that were achievable and reasonable, giving you appropriate commendation and certainly compensation for doing a good job, and the company was a very happy good place to work where the morale of the people was very good, the cooperation between people was very good. Oh, we had problems, of course, and we even had lay offs at some points. I remember in 1961 there was a big lay off. These were traumatic things for people because we had all grown up in the company. It was very sad when you had to tell somebody, "I'm sorry, but we just don't have work for you." The company tried to do the very best they could when they had those kinds of incidences. There were those blips in the curve, not everything was sugar and honey all the time. But it was always challenging and as I told my wife, it was good to get up and go to work. I looked forward to going to work at Raytheon Company.
Anyway I did finally get promoted to Manager of Contracts for the Missile Systems Division. At that point in my career which was about 16 years after I had joined Raytheon, I was offered a job as Vice President International at a company called Whitaker Corporation on the West Coast. I went out there for a couple of years until I was invited by Mr. Holmes to become Vice President International back here at Raytheon Company. Being a Concordian that sounded good to me compared to Southern California. This position now at Raytheon Company required that I be very much involved in all their international work around the world. We sold missiles in 19 different countries. Always with the blessings of the United States and always with the right legal licenses and everything. One of the things I think I am proudest of in my days at Raytheon was that in all the years that we did so much business overseas, there were many companies accused by the Justice Department of the United States of bribing people overseas and certainly conducting their business affairs in less than American ethics standards, never once was Raytheon accused or blamed for any of those things. Given the fact that we were probably the largest exporter out of New England of stuff to the Middle East, the Far East and Southeast Asia -- all those countries where things can get a little touchy sometimes -- we nevertheless were successful and we maintained which was absolutely an order for me from the Chairman and the President and the Board of Directors -- you will do business in an ethical way. We did, and we were successful and to many people's surprise. Many people down in Washington couldn't believe that we were conducting ourselves in such an ethical way and still getting all this business. I think it was because we had one of the world's greatest reputations for honesty and integrity and people believed this. It was great to do that.
Later on, the executive office of Raytheon wanted to combine all the marketing under one person because until that time there had been me as Vice President International and another fellow as Vice President Domestic, so they made me Senior Vice President in 1983 for all of corporate marketing. That's where I spent the last seven years of my career, very happily at Raytheon. It was a time of great challenge. Even towards the end of my career at Raytheon, it was obvious that the cold war was spinning down and that the company was going to enter a new phase for itself that required new management, new ideas. For all people there comes a time to leave. I had really not gotten that old yet. I was only 61 when I retired from Raytheon, so I decided I can't sit around the house all day long and I started my own office doing international marketing consulting. Quite frankly I was utilizing the business friendships and acquaintances that I had made primarily in the Middle East and the Far East during my term with Raytheon. I have had this little consulting business now for the past five years -- simply acting as an intermediary between people who need something in this country from somebody over there or if somebody needs over there from something here. I try to put two people together or the right organization behind them so that they are successful. I have a lot of fun doing that and life continues very well.
To elaborate on my work experience and living experience in Saudi Arabia -- of course, in the first sale to Saudi Arabia I was still Manager of Contracts for the Missile Division back in 1966. Mr. Joseph Alibrandi, who happens to have cousins that run the Arena Farms here in Concord, was the General Manager of the Missile Division, and we were in a staff meeting one day and got a call from Mr. Adams who had been called by the Secretary of Defense saying, "You guys from Raytheon have to go to Saudi Arabia and sell them Hawk missiles." So Alibrandi came back and asked who knows anything about Saudi Arabia and who knows anything about a proposal for Hawk missiles, and so we all looked around the room at each other and nobody was too knowledgeable about it. Finally one fellow said, "Oh, yea, I think we made a proposal about that, but I didn't think it was going anywhere." Well, the next thing I know it was about two days later and Thanksgiving weekend that off we went, Alibrandi and I and another fellow, to Saudi Arabia. We didn't even know how to get there to tell you the truth. I think we flew to London first and figured out how to get to Saudi Arabia from there. Alibrandi was not a guy who loved to be over there, and after he was there three days, he turned to me and said, "It's all yours, Phil, I'm taking the next plane out of here." From that day forward for about three years I lived pretty much all the time in Saudi Arabia, usually there for six weeks and maybe back here for a week, and back over for another five or six weeks, and back for a week. When I first got there, we had engaged the services of a resident representative there, and there was nothing to do but live in a place that he gave me to live and he gave me a boy to make my meals and a driver for a car, and not one of them could speak a word of English. I learned very early on the first morning when I wanted to get a scrambled egg for breakfast that I was going to have a tough time there until I learned how to speak Arabic.
Not only did we sell to Saudi Arabia but we sold to Kuwait and Jordan as well and at that time, a lesser amount to Israel. I have a picture here that was taken later on in 1981 and it includes his Royal Highness Prince Sultan Bin Abdul Aziz who is the deputy prime minister and the Minister of Defense. He's a brother of the King. Next to him is General Khaled Bin Sultan, his son, who at the time in 1981 was the commander of the air defense force for the King of Saudi Arabia but who had become the commander of all the Arab forces during the 1991 Persian Gulf War, then myself and then my Middle Eastern sales guy, Tom McCloud. This picture was taken on the occasion of my signing with Prince Sultan the biggest contract in Raytheon Company history -- $1.6 billion, and today it still stands as the largest contract. It was a contract for Hawk missiles to the Kingdom which even in those days was very concerned about its air defense and how it would operate to be able to defend the kingdom against assaults by Iraq or Iran. I know traditionally they used to talk about Israel, but frankly in those days they were just as much concerned about some of their Arab brethren to the North. So that was a point in my career that I am quite proud of as a matter of fact, but of course, that was later in my career after I came back from Saudi Arabia. I lived in Riyadh when I first there. There were only about 300 English speaking people in the whole city of Riyadh, which was the capital city and only about 100 of us were Americans. Of course, there is nothing to drink and no shows and nothing, so what you did was live in your little house, whatever your man had provided for you but in the nighttime you, would usually end up in the lobby in the only hotel in town drinking Coke and eating peanuts until they came out of your ears. That was the extent of your social life but you would find all the Americans meeting in there and talking to each other about conditions or whatever they were trying to sell at the time. Once in a while you would get invited to one of the Saudi Arabian officers homes. Of course when you went in the home, you never saw any women. They were all off in some other room. They might introduce you to their son if they had one, but you would never see a wife or a daughter. Most of those people of some consequence and wealth there had servants mostly from the Sudan or Yemen and they would all be men who served the dinner.
I learned a lot. I decided that the only way that I was going to be able to cope with these people was to try to understand their culture. It seemed even from the very beginning to me that I had to get to understand them. I decided the way to understand them was to read their Koran from front to back and ask as many questions as I could and learn to speak their language. That concept stood me in good stead going around the world. If I ever went into a new country, the first thing I did was read all about their culture and their religion and their economy, etc. You have to know a little bit about what you're dealing with there. I think the Saudi Arabian officials with whom I had to deal enjoyed that. They appreciated the fact that I was trying to learn. I wasn't cramming American down their throat. I elected to tell them the glories of the United States more by my actions than anything else, and I think they appreciated that. I tried not to be overbearing. There was a lot of animosity towards the representatives of companies from other countries, like Great Britain, France and Germany specifically. They were overbearing in their attitude towards the Saudi Arabians, and they took a little umbrage at that. My approach was a little bit different -- to try to understand them, to try to understand their religion which was much more important to them as the basis for their living than would be a single religion in this country, and try to understand their hierarchy. It stood me in good stead, and I became, I don't want to it sound boasting, pretty good at Middle Eastern affairs and how to conduct myself over there and how to sell to them over there and how to project the image of the company. I think that was well taken and I think that it stood me in good stead, again also in the Far East when I went there to do the same thing that I had done in the Middle East -- Japan, South Korea, Singapore, Malaysia, Thailand, Taiwan, India. It was an approach that I found to be successful for myself and just implemented it over the many years that I was doing that business.
It was a terrific experience, but I was always anxious to come home. I never wanted to do anything but get back to the United States. It's still the best country in the whole world. I've been in 70 countries around the world, some wealthy ones, some not so wealthy ones, and I can only tell you that this is still the greatest place in the world to live, even with all our problems. That's why people want to come here because it is still the best.
In those days of the peace movement and anti Vietnam War views, quite frankly working for Raytheon was considered by many people to be not a very nice thing to do. When I was at the corporate headquarters at the corner of Route 2, the D.C. Heath which was all liberal educators and book authors, were in a building up on the hill, and they wanted so badly to not be associated with Raytheon Company -- these people who made all these weapons of death and destruction -- they wouldn't even come down to the cafeteria. They tried so hard to stay outside the Raytheon fold. There were quite a few people who took exception to the fact that you worked for a big defense company at the time. I remember people calling the house and screaming "you merchant of death." It was not a happy time. Feelings ran very high in those days on both sides of that fence.
While I was very active at Raytheon all those many years, I still found time to serve on the School Committee here in Concord from 1972 to 1978. I had nine children and they were all going to Concord schools. In 1972 there was a problem in town about mandatory sex education in the schools. I was not too much in favor of that. A fellow that lived down the street came up to my house one day and said you've got to run for the School Committee. Even though I traveled a lot, I ran and I had a lot of support from a lot of people. You know how things are done in this town -- you have to go to coffees and you have to visit the people. I did all of that and I got myself elected and the bottom line of that whole operation was, "Well, you know you can't force things down people's throats." So what I elected to do on the School Committee was get through a motion that said look we'll have sex education for people who want their kids to get it and we'll have biology classes for people who don't want their kids to get it, and it worked out very fine. We had a good superintendent in those days named Ralph Sloan. We had other people on the Committee that were knowledgeable and very helpful. I have to frankly say that when I got on the Committee, I was looked upon as one of the two big conservatives on the Committee, the other guy being Wes Young over on Independence Road. Other members of the Committee I remember were Bob Butman and Ruth Salinger.
In those days we used to run the School Committee from 7:30 at night until early in the morning. It was nothing to be there until 1:00 or 2:00 in the morning. I remember it was a 22-hour flight from Tehran, Iran where I had been and I got back to the School Committee meeting late like almost midnight, and the meeting went until 4:00 a.m. and I was falling asleep because I had been traveling for such a long time. I wanted to make it because I think there was a critical vote that needed to be made that night.
People were devoted in those days and I don't know if the School Committee still runs that late because we had a lot of things to do in those days. It was not just the business about the sex education; there was a lot of things going on with the schools. It was Vietnam time, it was a time of social turmoil, society was changing at the time and there was a lot of experimentation. Drugs were becoming rampant. The Metco program was being introduced into the schools, and that caused some problems at the high school, not so much at the middle or elementary schools. Sex, drugs, social upheaval, they were part of the whole fabric of the time -- that and the job during the cold war and the tensions that that caused. It was a great time to be involved in it all because time went by quickly, it didn't drag on your hands.
I became a Corporator at Emerson Hospital and then on the Board of Directors, and it was one of the nicer things I think I've done for the community in my time. It was determined in the mid-1980s that we had to build a new building. Part of the thing I did in Saudi Arabia just to regress on that for a moment was in that three year period that I lived there, we were given a piece of ground that was a peninsula that stuck out into the sea and it was as flat as a floor. In fact some parts of it were a foot below sea level. On that piece of ground I had built a whole city, a whole community -- housing, schools, hospitals, roadways, communications networks, power and generation systems and I would say as an educational experience, that was one of the greatest I had. Just finding out how you get through the bureaucracy and how you got things into that country, got them erected and where were you going to get the people, dealing with construction company people that dealt overseas -- these are mostly professional overseas people and they're hard drinking, hard living people and how you were going to keep those guys boxed in in Saudi Arabia and get that work done. We used to send them out to Beirut on three-day passes about every month. That was a very educational experience in a very general sense that was way outside the missile business and technology and everything else. But when I was on the Board of the hospital and we determined that we needed to build a new wing, I was elected the chairman of the construction committee that put up what is now the North Building over there and the birthing center and all the other additives that are on the north side of the hospital. So I'm a little bit proud of that. And one of my daughters was one of the first ones to use the birthing room there. I think we got it done just in time.
Just to complete my efforts in Concord, later I had been put on the board of a company in West Concord called Technical Communications Corporation, which is in the encryption business, communications encryption -- data, fax, telephone, voice. They decided that part of the job on the board was to determine that we needed to replace the president that we had. So after I and others on the board voted to replace the president, we looked around the table and said, "Well, now who's going to run the company." They said I was the only one with general management experience so I had to run it. I was President of TCC for a year and a half until we found a new president. Typical of my life, I took that job saying yes, I'll take it for three months and it took 18 months before we found somebody. I'm still on the Board there. That was another technological experience that I had that was pretty interesting.
So my life has revolved around Concord. My family has grown up here. We've been here since 1962. We moved out of that little house in Burlington and moved to Concord frankly because our two oldest daughters were at Rose Hawthorne School. We came over here to Brister's Hill Road and bought this piece of ground from a fellow named John Finigan who was at the time a selectman in town. He developed this area into about 15 house lots. I bought it in 1961 and then in 1962 we built the house. The builder of this house was a fellow named John Segadelli who lives over on the Ridge. Since 1962 we've been very happily ensconced here.
My daughter had a horse farm over on Virginia Road. After Rose Hawthorne closed all the kids went to Concord-Carlisle High School, and I was very happy when one of the years I was on School Committee, my daughter Janice graduated from high school so I was able to give out her diploma. My wife Nancy has done a lot of historical research in Concord and she's done such things as getting the house that my daughter had on Virginia Road as part of the farm over there on the National Register. She did a lot of work with a family called Algeo who owned the property at one time. It's been a good life. We even had a horse out back for a while, raised a few dogs, along with some guinea pigs and cats.
