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Industry to Congress: BAE, Other Firms Face Shutdown-related Furloughs

Oct. 4, 2013 - 03:10PM   |  
By AARON MEHTA   |   Comments
A BAE Systems employee works on an APKWS laser-guided rocket in Nashua, N.H. A defense industry group says many BAE workers in the US could be furloughed as a result of the government shutdown.
A BAE Systems employee works on an APKWS laser-guided rocket in Nashua, N.H. A defense industry group says many BAE workers in the US could be furloughed as a result of the government shutdown. (BAE Systems)
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WASHINGTON — As the US government shutdown enters its fifth day, a major defense industry group has sent a letter to members of Congress warning that major furloughs in the industry work force are on the horizon.

“As the shutdown is having a terrible and demoralizing impact on government employees, the defense industry is also experiencing serious and negative impacts,” the letter from the National Defense Industrial Association reads. “All of us support an end to the shutdown and a return to regular order in the appropriations process.”

The letter, addressed to the four Congressional leaders, is co-signed by NDIA President and CEO Lawrence Farrell and Chairman Sean O’Keefe. Copies were also sent to Defense Secretary Chuck Hagel and members of major Congressional committees.

“BAE Systems estimates the shutdown may hit between 10 and 15 percent of its U.S. workforce of nearly 35,000,” according to the letter, which adds that technology services firm MicroTechnologies LLC has already furloughed a quarter of its 400 employees.

Representatives for either company could not immediately be reached for comment.

“One NDIA corporate member has furloughed 1,500 direct and sub-contract employees, nearly 10 percent of the company’s workforce. Another has had furloughs impact seven percent of its 1,000 employees, with that number doubling or worse if the shutdown continues into next week,” the letter continues.

In addition, thousands of Sikorsky Aircraft employees face furloughs on Oct. 7 under a plan announced by parent company UTC.

The industry group also raised the specter that defense workers may resign rather than be furloughed, and that furloughed workers may not return to their jobs when funding streams reopen.

“Uncertainty has buffeted the defense industry for the last several years, and while some larger defense companies have downsized to weather the storm, small businesses cannot adapt so easily,” reads the letter.

While defense industry workers might avoid furloughs, many of the Pentagon employees who facilitate the flow of contracts and production have been forced home due to the shutdown.

“The absence of Defense Contract Management Agency quality control specialists means our companies cannot certify that their equipment is top quality and send it forward to our warfighters on the battlefield in Afghanistan,” the authors of the letter wrote. “The furlough of Defense Contract Audit Agency auditors means our companies cannot certify their invoices for government payment. And without Defense Finance and Accounting Service employees on the job, even certified invoices cannot be paid.”

Even at facilities where noncivilian DCMA workers continue to do their jobs, there is a risk of major delays to time-sensitive programs such as the F-35 joint strike fighter.

NDIA, the largest defense industry trade organization in the US, represents more than 1,600 corporate members.

Paul McLeary in Washington contributed to this report

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