The U.S. Department of Defense has brought back most of its furloughed civilian employees, such as DCMA and DCAA workers, essentially mitigating the need for immediate industry furloughs based solely on the absence of inspection and certified personnel.
This allowed, for example, United Technologies, the Hartford, Conn.-based maker of Black Hawk helicopters, to cancel plans to furlough 4,000 workers.
But it’s minor relief at best for the industry as a whole, the Aerospace Industries Association tells Industry Today. In fact, many concerns remain.
“Industry still has concerns about the impacts of the ongoing government shutdown and strongly urges Congress and President (Barack) Obama to work together on a bipartisan solution that reopens the government and raises the debt ceiling,” association spokesperson Dan Stohr said.
On Saturday, Defense Secretary Chuck Hagel reportedly announced that civilian employees who “contribute to the morale, well-being, capabilities and readiness of service members” may return to work, courtesy of a broader legal interpretation of the Pay Our Military Act, which was passed by Congress last week just before the shutdown began.
“However, there will still be industry furloughs for contracts on which stop work orders have been received because fiscal year 2013 funding has expired,” Stohr said.
Lockheed Martin is an example of this. The Maryland-based manufacturer said it had planned to furlough 3,000 workers but dropped that figure by 600 on Monday in light of Hagel’s announcement.
“The Department of Defense’s decision will not eliminate the impact of the government shutdown on the company’s employees and the business,” company spokesman Gordon Johndroe said Monday morning. “The company will still have approximately 2,400 employees unable to work because the civil government facility where they perform their work is closed, or we’ve received a stop-work order on their DOD or civil government program.”
Johndroe added: “Of the 2,400 employees, approximately 2,100 work on civilian agency programs and 300 works on DOD programs. The affected employees are located in 27 states, with the majority based in the Washington, D.C. metropolitan area.”
Meanwhile, Meghan McCormick, a Boeing spokeswoman, said Monday morning that the Chicago-based company is continuing to work with customers and suppliers to implement contingency plans to maintain normal operations in as many parts of the business as possible.
“While the company is working to limit the negative impact of the shutdown on customers and employees, we expect some consequences could emerge in the coming days, including limited furloughs of employees in some areas,” she said. “At this time, we expect the furloughs to be limited to employees in Boeing Defense, Space & Security.”
In regards to the impact of the Department of Defense’s announcement that many employees will return to work, McCormick said, “We have not received any specific information from our defense customers about plans to reinstate part of their workforce; therefore, it would be inappropriate to speculate about what it might mean for Boeing employees and operations.”
BAE Systems is also feeling a wide range of effects stemming from the government shutdown. President and CEO Linda Hudson told employees in a message Sunday that roughly 1,000 intelligence and security workers 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,” Hudson said in the message. “Our company is taking extraordinary steps to minimize the impact to our business and mitigate the effect on employees.”
Hudson added that the company has continued to pay workers unable to access customer sites during the past week. It will continue to cover certain coverage for non-union employees and their families for up to 90 days.
“But these efforts can’t continue forever,” Hudson said.
Peter M. Steffes, Vice President of Government Policy at the National Defense Industrial Association, could not agree more. While thankful that the aforementioned furloughs have come to an end, there’s more work to be done.
“Although these temporary solutions somewhat ease the immediate consequences of the government shutdown, these stopgap measures cannot sustain industry for long,” Steffes says. “What industry needs, and has needed for quite some time, is certainty. Although we are no fans of defense budget reductions, we understand that they are coming. But with shockwaves of uncertainty hitting us again and again, defense industry has even more difficulty adjusting to a reduced top line.”
He adds: “We hope the two parties will work together to bring government back to work and to deliver some certainty to our member companies.”
So, too, do those at NASA. That is where virtually the entire staff has been furloughed, according to AIA, with only 549 employees out of more than 18,000 remaining on the job.
“The Pay Our Military Act does not address NASA personnel, so 97 percent of NASA employees remain on furlough,” Stohr said on Monday. “Several contractors with NASA will be furloughing employees because they have no access to NASA facilities. We don’t yet have a way to quantify that effect.”
This, AIA President and CEO Marion C. Blakey said in a Friday statement, has stopped important research and development work and has the potential to delay launches of spacecraft such as the replacement of NOAA’s polar-orbiting weather satellite, which provides vital information to predict hurricanes, tornadoes and severe winter storms.
“Shutting down the government has been a tragic mistake,” Blakey said. “There are too many government responsibilities, from national security to public safety, which have been negatively impacted either directly or indirectly. It is harming our economy unnecessarily when it is only slowly recovering, resulting in widespread ripple effects and a loss of public confidence.
She added: “In addition, a first-in-history default by the U.S. government on its public debt would have a much worse impact on the U.S. and world economies than the 2009 financial crisis. We strongly encourage our elected leaders to reach an agreement reopening the government and raising the debt limit as soon as possible.”