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Boeing Warns of Furloughs from Shutdown


As U.S. lawmakers raced to avert a debt default, defense contractors pushed to highlight the harmful effects of the government shutdown, including more furloughs.

Boeing Co., the world's largest aerospace company, said it may join a rising number of companies forcing its employees to take mandatory leaves of absences, known as furloughs, because of the gridlock on Capitol Hill.

The Chicago-based company, whose defense, space and security unit accounts for about a third of the firm's 174,000 employees, was able to defer sending home workers after the Defense Department recalled civilians who oversee contracting activities, according to Daniel Beck, a company spokesman.

"While the return of these DoD employees has at least delayed the need for furloughs at some Boeing facilities, the continued impact of the government shutdown could still result in furloughs for some employees," Beck said in an e-mail.

He didn't specify how many employees would be affected if Congress and the White House can't reach a deal to end the government shutdown.

The Treasury Department has said it will exhaust its ability to borrow on Wednesday. Stock markets were up a day before the deadline, as investors were hopeful of a Senate deal to end the shutdown and to extend the government's borrowing authority.

Like other contractors, Boeing would have to furlough employees if agencies issue stop-work orders, limit access to installations where company employees work, and curtail government inspections or eliminate funds to continue operations, Beck said. The company is one of the Pentagon's biggest contractors and makes numerous weapons systems, including the F/A-18F Super Hornet.

Lockheed Martin Corp., the world's largest defense contractor, initially planned to furlough some 3,000 of its employees, though later reduced that number to 2,400 after the Pentagon ordered most of its civilians who were sent home back to work. Other companies have made similar workforce reductions.

Meanwhile, almost 100 chief executive officers of defense firms joined a conference call Tuesday to discuss the political impasse in Washington, D.C., according to Dan Stohr, a spokesman for the Arlington, Va.-based Aerospace Industries Association, a trade group representing defense and aerospace companies.

The call was designed to encourage the officials to voice their concerns about the political impasse to their elected representatives, Stohr said. "The concerns are obvious," he said. "We can't afford to default on our debt and the government shutdown is imposing very significant, real and immediate impacts on industry."

And it's not just the defense industry, Stohr said. The National Aeronautics and Space Administration has furloughed 97 percent of its workforce, he said. The Federal Aviation Administration has closed an aircraft registry office, halting some deliveries of planes to customers, he said.

Indeed, some of Boeing's non-defense workers have already been impacted, Beck said.

"We have Boeing employees supporting other activities that continue to be adversely affected by the shutdown, including NASA and other government customers," he said. "The Defense Department action does not address those employees or operations."

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