Government Shutdown Has Domino Effect on Defense Industry

WASHINGTON - While the government shutdown has had adverse impacts on federal employees and government services, its negative effects are also trickling down to one key part of the private sector: the defense industry.

Defense mega contractor Lockheed Martin said at least 3,000 employees will be furloughed starting Monday if the government shutdown continues.

"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," Marillyn A. Hewson, the chief executive of Lockheed Martin, said in a statement. She encouraged employees to use part of their vacation time while they're being furloughed so they can still get paid.

United Technologies Corporation, a Connecticut-based company, said 5,000 workers could be furloughed if the shutdown continues beyond October. The company said about 2,000 workers would be furloughed on Monday, specifically those who produce the Black Hawk helicopter.

The defense industry, which relies heavily on U.S. government contracts, is passing along the impact of the shutdown to its employees across the country.

Linda Hudson, president and CEO of BAE Systems, Inc., said in a statement, "The impact on our Intelligence & Security sector has been significant; with about 1,000 employees already excused from work at their customer sites."

Many of the furloughs at these defense companies are due to the fact that inspectors from bureaucracies like the Defense Contract Management Agency are not working, says Chip Sheller, vice president for Communications at the Aerospace Industries Association. Without government inspections on hand, he says, production must be slowed or halted.

While some companies have not outlined specific plans for how to deal with the shutdown, many are saying that they will still feel the brunt of it.

Meghan McCormick, a spokeswoman for Boeing, said the company is "working to limit the negative impact of the shutdown on customers and employees," but added that furloughs are expected if the government shutdown continues.

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