U.S. defense industry jobs at risk from federal government shutdown

Oct. 7, 2013 at 6:34 PM
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WASHINGTON, Oct. 7 (UPI) -- Thousands of defense industry jobs in the United States are at risk from direct or indirect effects of government shutdown, company data showed.

Exactly how many jobs will be lost or temporarily vanish remains unclear, as many of the companies likely to shed or suspend jobs have yet to release data.

Three major players in the U.S. defense and security industry -- BAE Systems, Lockheed Martin and Sikorsky -- indicated thousands of jobs would be lost or made temporarily unavailable. Boeing warned it could furlough defense jobs linked to U.S. government contracts.

About 3,000 Lockheed Martin employees linked to affected U.S. government facilities would be furloughed and more layoffs could follow, the Maryland company said.

A furlough in the United States means a temporary unpaid leave affecting employees in special conditions within the company or outside it -- a term usually not understood by many of the U.S. business partners abroad.

Lockheed Martin, which has headquarters in Bethesda, makes fighter planes, missile systems, satellites and numerous other defense-related equipment.

Sikorsky Aircraft parent United Technologies said it could furlough at least 5,000 employees and Sikorsky would lay off at least 2,000. Many of the job losses could occur between now and November if the government deadlock wasn't resolved earlier.

Job losses at BAE Systems appear likely to be longer lasting. The aviation and security manufacturer said about 1,000 employees of its intelligence and security division would be affected.

"During this standoff, we've witnessed more than 800,000 government employees furloughed," BAE Systems Chief Executive Officer and President Linda Hudson said in a message posted on the company website.

"At BAE Systems Inc., approximately 1,000 I&S employees working at government customer sites have already been excused from work. And many other facilities across our business have begun to experience shutdown-related disruptions to workflow, some minor and others less so.

"This has left a lot of employees wondering, "Could my job be affected if the government shutdown continues?"

BAE Systems, Hudson said, "is taking extraordinary steps to minimize the impact to our business and mitigate the effect on employees."

Lockheed CEO Marillyn A. Hewson in a note to employees said, "I'm disappointed that we must take these actions, and we continue to encourage our lawmakers to come together to pass a funding bill that will end this shutdown."

Aviation giant Boeing warned it could furlough some employees in its defense, space and security operations if the federal budget stalemate continued.

Furloughs currently are not expected in the commercial airplanes unit, Boeing spokeswoman Meghan McCormick said. That export-oriented unit employs the vast majority of Boeing's 84,000 workers in Washington state.

Boeing is "looking at the possibility of furloughs that could start next week" in its defense side, McCormick said.

"It's such a fluid situation" because the shutdown of some government functions affects access to federal worksites, the availability of federal inspectors and many other operations," the Seattle Times and Columbian.com quoted McCormick as saying.

"We're looking at each program on a case-by-case basis."

News of Boeing furlough plans came as the company received a major setback in Asia as Japan Airlines announced a $9.5 billion switch to Boeing rival Airbus.

Japan Airlines will buy 31 Airbus A350s, a new long-range, fuel-efficient jet, and will have an option on 25 more Airbus planes, Airbus said on its website.

Airbus President and CEO Fabrice Bregier said, "It fills us with pride to see a leading Japanese airline start a new chapter with us."

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