Christopher Calio
President and Chief Operating Officer at RTX
Well, thank you, Greg, and good morning, everybody. I'm on Slide 3. As you know, we announced back in January, our plan to realign our portfolio into three business units; Collins Aerospace, Raytheon, and Pratt & Whitney. And as we said, this realignment has three primary objectives: the first is, to better align our market-leading franchises with our customers' priorities, ensuring more effective coordination and collaboration across our businesses; the second is, to enhance our performance and capture additional synergies from both the product and technology standpoint; and third, to better leverage our resources to optimize our investments and cost structure. So, let me update you on where we are in the process.
After continued internal analysis and customer engagement, we determined the major content shifts within our portfolio, necessary to achieve these objectives. First, the multi-domain command and control solutions of RIS and RMD will transition to the Mission Systems strategic business unit within Collins. So, create a more focused business to support connected battlespace opportunities. Additionally, RIS' Air Traffic Management business will be integrated into the Collins' Connected Aviation Solutions strategic business unit, further consolidating what we call the connected-ecosystem of flight data and management into one business.
These two moves put Collins at the center of our company-wide collaboration efforts, and they will now be responsible for more than half of our revenue synergy projects. In parallel, we will move Collins' Intelligence, Surveillance and Reconnaissance business to the new Raytheon business unit, combining complementary sensing and imaging technologies to improve our offerings for multiple customer applications.
And lastly, the new Raytheon business will merge the remaining RIS in RMD businesses, into strategic business units aligned around specific customers, such as the Air Force, Army, Navy, Space and Missile Defense. When this is complete, the top customer of each of these strategic business units will account for 70% or more of that business unit sales.
In addition, we will establish a strategic business unit that will operate like a merchant supplier within the Raytheon business unit. We'll centralize components and subsystems that are sold internally, as well as to a broad array of government, commercial, other prime customers, enabling us to sell more effectively into these channels. As part of this realignment, we're pleased to announce that the new Raytheon business unit will be led by Wes Kremer, currently, the President of RMD. Wes has over 20 years of experience across multiple businesses and product lines within Raytheon, he is uniquely qualified to lead this business.
We are now in the middle of the implementation phase, including our analysis and validation of targeted gross cost savings. We'll provide more details on the new design and implementation status, including those savings at our Investor Meeting at the Paris Airshow. So overall, good progress thus far as we remain focused on our goal to operate under the new structure, beginning in July.
With that, let's move to Slide 4, and I'll provide an update on the current environment. In general, not a lot has changed since we spoke back in January and demand remains strong across our end-markets. On the Event side, as Greg mentioned upfront, some of the awards we received in the quarter and our record backlog. On the Commercial side, we saw strong aftermarket growth in the quarter, as airlines are preparing to support the busy summer travel season. With air traffic increasing and retirements remaining very low, we continue to see strength in parts, repair, provisioning and maintenance across our end-markets. Given this demand, our focus remains on ensuring we have the capacity, supply-chain performance and operational excellence, necessary to meet our commitments to customers. So let me start and provide some color on capacity.
At RMD, we continue to invest in new test equipment, tooling and automation at our Tucson, Andover and Huntsville facilities, to support the ramp-up on key programs such as AMRAAM, StormBreaker, SM-3, SM-6 and Patriot GEM-T. At Pratt's Asheville, North Carolina Turbine Airfoil site, we now have 63% of machining production assets onsite, and are progressing towards the first article inspection by the end of May. On our way to improving productivity and cost in support of the high-volume GTF, and F-135 programs.
While in Tucson, we recently completed a classified space conversion, bringing our total number of classified seats added over the past two years, almost 1,000, with the expectation of an additional 900 more by the end of '23. This will create the classified lab capacity for RMD to execute on recent development wins, such as HACM, Halo, NGI.
Furthermore, we are expanding our MRO network. This past quarter, two new facilities join the GTF aftermarket network, a second MRO shop in Japan, and 155,000 square-foot shop at Delta Airlines TechOps in Atlanta. We of course also remain very focused on the health of the supply-chain, which continues to be a challenge, from a performance and cost perspective.
Starting with performance, while we have experienced stabilization in certain areas such as electronics, continue to experience challenges in castings, forgings, raw materials, and machining. And you've heard us talk before about our in-person support embedded our supplier sites, and that continues to increase. Today, we are present in more than 400 suppliers with a focus on high-impact locations.
And specific to Defense, we have significantly increased onsite support in the last quarter, allowing us to help clear bottlenecks, better execute engineering and quality initiatives, and provide improved overall visibility. And at RMD, this help yield a 5% improvement in material receipts year-over-year, enabling increased flow through our factories. Additionally, we held an RTX Supplier Conference just a few weeks ago, where we engaged with about 70 key suppliers during detailed action plans to ensure future capacity, and to reduce current overdue positions.
On the cost side, the overall inflation picture remains persistently high, and we are attacking those inflationary pressures from several angles. We have almost 2000 cost-reduction projects ongoing related to our supply-chain, both product and non-product, including negotiating better contractual terms, transitioning work to lower cost sources, and part redesigns to reduce cost. We also going deeper into our supply-chain to better understand their usage of constrained raw materials such as aluminum, titanium and nickel, so we can get a complete picture of our embedded spend and to leverage total raw-material purchases, drive improved cost positions, and secure supply throughout our value stream.
And lastly, we continue to leverage our core operating system to execute on our cost-reduction initiatives, as well as footprint modernization. As we've previously talked about, we have thousands of ongoing projects, many of which are at the manufacturing line or cell-level to take cost out of our operations. These range from things like redesigning material and machining flow to reduce labor hours and cycle time, implementing closed door machining to enable the completion of a part in one continuous process without any operator intervention. But these are relatively small initiatives with short paybacks, they are part of a continuous commitment to improvement and efficiency.
So before I turn it over to Neil to recap the financials, I do want to provide a brief update on the GTF program. As you know, since the GTF program went into service in 2015, we have continued to introduce upgrades and improvements to increase reliability and durability. With respect to reliability, we have met the target level for dispatch reliability, this is now a mature engine levels. With respect to durability, we have improved time on wing since program inception, again time on wing, meaning how long engines can be operated before needing to be removed for maintenance. But we are not yet at the level we and our customers expect. This has put stress on the operations of the fleet.
We continue to develop upgrades to the current GTF configuration to improve durability. We're also expanding our MRO [Phonetic] capacity and working to reduce shop visit turnaround times to improve service availability. It will take some time to realize these benefits, but we are continuing to invest in time on wing improvements, as we were able to do over the course of the V2500 program. And of course, in parallel, we continue to execute on our GTF Advantage development program, our next-generation GTF configuration. We will incorporate all of our experiences in technical learnings since entry-into-service.
Okay. With that, let me turn it over to Neil to walk-through our financial results.
