European-US conflict could hurt business, Raytheon chief fears

US defense firm Raytheon said yesterday the Iraq conflict and a European Union bitterly divided over the war could hamper the arms trade between Europe and the United States. «It may well become potentially very difficult in the coming period,» Norman Ray, president of Raytheon International Inc., maker of the Tomahawk cruise missile in use in the Iraq conflict, told Reuters at the sidelines of an economic conference in Athens. Ray said the differences over the war would make it harder for US defense firms to gain access to other markets. The European Union has been divided over Iraq, with Germany and France vehemently opposing the war and fellow EU members Britain, Spain and Portugal backing the US-led attack. «Differences on Iraq will make market access more challenging… for US (defense) companies, access is the key to growth,» Ray said in his speech to the conference. He said Washington’s decision to bypass the United Nations and go to war on Iraq despite staunch opposition from some European countries had created some bad feelings both in Europe and in the United States. «There can be temptations now on both sides of the Atlantic to be more conservative during an adjustment period,» Ray told Reuters. «One would be a fool not to think like that.» Ray also told Reuters defense companies could also help iron out differences between Brussels and Washington. «However, defense businesses could be an area of business that could facilitate the rapprochement of the two sides (Europe and the United States) after the end of the war,» he said. He said defense firms should now focus primarily on their government-clients as European defense budgets dwindle. «To be successful, a company must stay focused on the government customer… it must approach its defense business the same on both sides of the Atlantic,» he said in his speech to the conference organized by The Economist Intelligence Unit. Raytheon in based in Lexington, Massachusetts. It is in talks with the US Navy to speed up production of its newest Tomahawk missile. (Reuters)