Bloomberg News

United Technologies Cancels 4,000 Furloughs as Shutdown Eases

October 07, 2013

United Technologies Corp. (UTX:US), maker of Black Hawk helicopters, canceled plans to furlough as many as 4,000 workers after the Pentagon said most civilian employees it sent home in the federal shutdown will be put back to work.

The U.S. government’s sixth-largest contractor had planned to put 2,000 workers on leave beginning today at its Sikorsky Aircraft unit after military inspectors required to monitor production work were put on leave. Another 2,000 workers at the Hartford, Connecticut-based company’s Pratt & Whitney and UTC Aerospace Systems had faced furloughs this week.

The Pentagon said on Oct. 5 that 90 percent or more of about 350,000 workers it furloughed last week will be coming back, including inspectors who review contract work. United Technologies was the first of the top military contractors to reverse furloughs. Other leading suppliers, including Bethesda, Maryland-based Lockheed Martin Corp. (LMT:US), hadn’t called off plans to put staff on leave as of 6 p.m. yesterday Washington time.

“United Technologies greatly appreciates the efforts of those in the administration and Congress who facilitated the recall of the furloughed civilian employees,” the company said in an e-mailed statement yesterday.

Robert Hale, undersecretary of defense, said on Oct. 5 that he had no concrete estimate for how many civilian defense employees would remain off the job during the shutdown. Some of those who won’t return include staff in information technology, auditing and public affairs, he said.

Ending Shutdown

“We haven’t solved all the problems,” Hale told reporters on a conference calls. “We still hope Congress will act very quickly to end this shutdown.”

The Aerospace Industries Association, an Arlington, Virginia-based trade group, said in a statement last week that companies had voiced concerns that if the shutdown continued, they would be forced to furlough tens of thousands of workers.

Lockheed, the world’s largest defense contractor, said on Oct. 4 that it had identified about 3,000 of its employees for furloughs starting today. It’s still too early to tell if those plans will change, Gordon Johndroe, a spokesman for the company, said yesterday.

“We’ll continue to be in close contact with the Pentagon and are hopeful that our programs and contracts can move forward,” Johndroe said in an e-mail.

Awaiting Assurances

Other contractors are likely to follow Lockheed’s lead and wait for some assurances from the Pentagon or Congress before ending plans for furloughs, said Mark Amtower, who owns a Clarksville, Maryland-based government-contracts consulting firm.

“Are they going to pay them now? Are they going to get paid later?,” Amtower said in a phone interview. “A little clarification from Congress would be nice.”

A U.S. unit of London-based BAE Systems Plc (BA/) said last week that it had excused from work about 1,000 employees in its intelligence and security division.

As many as 10 percent to 15 percent of the 34,500 U.S.- based employees of BAE Systems Inc., its U.S. unit, may be affected by the shutdown, the company said last week.

Brian Roehrkasse, a spokesman for the division, didn’t provide comment on whether any of its workers may be reinstated or protected from the government closing after the Pentagon decision.

“Many of those 1,000 workers who were excused by their government agencies” support intelligence agencies, not the Defense Department, Roehrkasse said in an e-mail yesterday.

Boeing Co. (BA:US), the No. 2 contractor, said last week it may begin “limited furloughs” this week. The Chicago-based company hasn’t received “specific information” from its Defense Department customers about the plans to reinstate workers, said Meghan McCormick, a Boeing spokeswoman.

“Therefore it would be inappropriate to speculate about what it might mean for Boeing employees and operations,” McCormick said in an e-mail yesterday.

To contact the reporter on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


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Companies Mentioned

  • UTX
    (United Technologies Corp)
    • $110.05 USD
    • 0.34
    • 0.31%
  • LMT
    (Lockheed Martin Corp)
    • $175.11 USD
    • -0.20
    • -0.11%
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