FOR IMMEDIATE RELEASE                                          AT
THURSDAY, OCTOBER 2, 1997                          (202) 616-2771
                                               TDD (202) 514-1888


   JUSTICE DEPARTMENT REQUIRES RAYTHEON TO SELL KEY ELECTRONICS
 BUSINESSES IN ORDER TO GO FORWARD WITH ITS HUGHES AIRCRAFT DEAL


     Justice Says Divestitures and Other Relief Will Preserve
  Competition For Military Infrared Sensors and Tactical Missiles


     WASHINGTON, D.C. -- The Department of Justice reached an
agreement today with Raytheon Company that will allow the company
to go forward with its $5.1 billion acquisition of General Motors
Corporation's Hughes Aircraft Company subsidiary, but only if
Raytheon sells two critical defense electronics businesses, and
sets up firewalls to preserve competition on an upcoming bid for
a new missile.  Today's agreement will result in the largest
divestiture since the end of the Cold War, when efforts to
consolidate the defense industry began. 

     The Department said that the agreement will preserve
competition in the research, development, and sale of electro-
optical systems for ground vehicles, and in the sophisticated
infrared sensors used in both ground and aviation weapons
systems.  The agreement will also preserve competition in the
production of a new, advanced missile that the Army intends to be
its primary antitank missile.

     "The U.S. military needs weapons at prices American
taxpayers can afford.  And if we are to insure future innovations
that will protect our armed services, we must be sure that
competitive conditions are preserved," said Joel I. Klein,
Assistant Attorney General in charge of the Department's
Antitrust Division.  "Today's agreement demonstrates the
Division's absolute commitment to protect competition in the
defense industry even as a considerable amount of consolidation
occurs as a result of the substantial post-Cold War build down."

     The Department also said that it would continue to monitor
negotiations between the two companies and the Department of
Defense regarding the benefits that will be passed along to the
government because of the substantial efficiencies the parties
expect to achieve by combining the production of their AMRAAM
missiles, a medium range air-to-air missile.  Although the
Department expects that these negotiations will be concluded
successfully, it will not file its complaint and proposed
settlement with the court until that happens.

     The Antitrust Division concluded that Raytheon's original
proposal to acquire Hughes would have substantially lessened
competition in both infrared sensors and electro-optical systems. 
To satisfy the Division's concern, Raytheon has agreed to sell
off the Dallas-based infrared sensor business it recently
acquired from Texas Instruments, as well as the ground electro-
optical systems businesses located in El Segundo, California and
La Grange, Georgia, that it had proposed to purchase from Hughes. 
Under the terms of the agreement, these two businesses will be
preserved as separate entities by Raytheon until they are sold.
Also, any purchase of these businesses must be approved by the
Antitrust Division and Department of Defense, so that the
competitive viability of the businesses can be ensured.

     Infrared sensors detect the radiation, or heat, that is
emitted by all objects.  The sensors can be used to create
television-like images in total darkness.  Infrared sensors are a
primary component of electro-optical systems, which can be used
for "night vision" surveillance and in detecting and guiding
weapons to their targets.

     Raytheon and Hughes are both leaders in the development and
production of infrared sensors.  Both companies also supply
electro-optical systems to the U.S. military for a wide variety
of applications, including use in certain ground military
vehicles such as the M-1 Abrams Tank and the M-2 Bradley Fighting
Vehicle.

     Today's agreement also includes provisions to protect
competition during the bidding for a new advanced antitank
missile system, the Follow-On-To-TOW or FOTT program, which is
designed to replace the widely used TOW wire-guided missile.  The
contract for this program should be awarded in the first half of
1998, and Hughes and a joint venture of Raytheon and Lockheed
Martin will be bidders. 
 
     The agreement between the Antitrust Division and Raytheon
preserves the independence of the two competing teams by
requiring Raytheon to establish "firewalls" that essentially seal
off the Raytheon/Lockheed Martin and Hughes FOTT teams from each
other and from the upper management of Raytheon.  These measures
should preserve aggressive competition in the bidding for the
FOTT program.

     Klein said that the Justice Department and the Department of
Defense have been working closely and effectively on the
Raytheon/Hughes deal, and will continue to cooperate and
coordinate on other defense industry mergers.

     Raytheon is a Delaware corporation headquartered in
Lexington, Massachusetts.  Raytheon's 1996 sales, including the
business of the recently acquired Texas Instruments' Defense
Systems and Electronics unit, were about $13 billion. Raytheon
produces aircraft, guided missiles, space vehicles, radar
systems, and defense electronics equipment. 

     Hughes Aircraft is an indirect subsidiary of General Motors,
and has its headquarters in Arlington, Virginia.  Hughes Aircraft
produces electro-optical systems, guided missiles, radar, and
other defense electronics. It had 1996 sales of $6 billion.
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