By Alwyn Scott
NEW YORK Oct 2 The U.S. government shutdown is
beginning to hit the factory floor, with major manufacturers
like Boeing Co and United Technologies Corp
warning of delays and employee furloughs in the thousands if the
budget impasse persists.
Companies that rely on federal workers to inspect and
approve their products or on government money to fund their
operations said they are preparing to slow or stop work if the
first government shutdown in 17 years continues into next week.
United Technologies said nearly 2,000 workers in its
Sikorsky Aircraft division, which makes the Black Hawk military
helicopter, would be placed on furlough Monday if the shutdown
continues. That number would climb to more than 5,000 and
include employees at its Pratt & Whitney engine unit and
Aerospace Systems unit if the shutdown continues into November,
the company said in a statement.
The Sikorsky employees who would be affected work at
facilities in Stratford, Connecticut, West Palm Beach, Florida
and Troy, Alabama.
The Pratt & Whitney and Aerospace Systems divisions would be
affected if the shutdown persists through next week, UTC said.
UTC relies on the government's Defense Contract Management
Agency to audit and approve manufacturing processes for its
military products. The DCMA inspectors were deemed non-essential
federal employees and are on furlough, UTC said.
Aircraft maker Boeing said it is taking steps to deal with
possible delays in jetliner deliveries, including its new 787
Dreamliner, because thousands of U.S. aviation officials needed
to certify the planes have been idled.
Any delays would likely affect the plane maker's newest
models and could affect development of other models such as the
stretched 787-9 derivative, the company said.
Older models like the 737, which don't require significant
engineering as part of the production, are less likely to be
Boeing said the potential delays depend on how long the
shutdown lasts. It also would affect numerous programs and
products in the company's defense business.
"We anticipate that we'll be able to deliver some airplanes
during the shutdown," said John Dern, a spokesman at Boeing's
headquarters in Chicago.
"For models that we've delivered lots of before with the
same engineering, we have the authority, delegated to us by the
FAA" to certify, Dern added, referring to the Federal Aviation
The FAA said on Wednesday it is furloughing 15,500 workers
out of 46,000 employees. The agency said that while some
aircraft certification work will continue during the shutdown,
it will be limited.
The slowdown would affect Boeing's 787 factory in North
Charleston, South Carolina, because the FAA has held on to some
of its airplane certification roles at that relatively new
factory, Dern said.
Boeing said it was taking steps to deal with potential
delays, but declined to be specific.
Companies who rely heavily on government funds are also
vulnerable. USEC Inc, a supplier of enriched uranium for
commercial nuclear power plants, said it may have to furlough
some workers at an enrichment project in Ohio if the shutdown
extends beyond Oct. 15.
USEC needs about $48 million to complete the $350 million
American Centrifuge project, which is 80 percent funded by the
U.S. Department of Energy.
The plant, which will produce low-enriched uranium used to
make nuclear fuel, employs 959 workers, mainly in Ohio and
Tennessee. It is scheduled to be completed by the end of this
"The money that would allow us to carry on for the next two
weeks is the fiscal year 2013 funds that we have been able to
carry over," Paul Jacobson, vice president of corporate
communications, told Reuters.
USEC, which has about 1,770 employees, did not disclose how
many employees could be furloughed.