U.S. companies warn of delays, furloughs from shutdown

Wed Oct 2, 2013 7:42pm EDT
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By Alwyn Scott

NEW YORK (Reuters) - The U.S. government shutdown is beginning to hit the factory floor, with major manufacturers like Boeing Co (BA.N: Quote) and United Technologies Corp (UTX.N: Quote) warning of delays and employee furloughs in the thousands if the budget impasse persists.

Companies that rely on federal workers to inspect and approve their products or on government money to fund their operations said they are preparing to slow or stop work if the first government shutdown in 17 years continues into next week.

United Technologies said nearly 2,000 workers in its Sikorsky Aircraft division, which makes the Black Hawk military helicopter, would be placed on furlough Monday if the shutdown continues. That number would climb to more than 5,000 and include employees at its Pratt & Whitney engine unit and Aerospace Systems unit if the shutdown continues into November, the company said in a statement.

The Sikorsky employees who would be affected work at facilities in Stratford, Connecticut, West Palm Beach, Florida and Troy, Alabama.

The Pratt & Whitney and Aerospace Systems divisions would be affected if the shutdown persists through next week, UTC said.

UTC relies on the government's Defense Contract Management Agency to audit and approve manufacturing processes for its military products. The DCMA inspectors were deemed non-essential federal employees and are on furlough, UTC said.

Aircraft maker Boeing said it is taking steps to deal with possible delays in jetliner deliveries, including its new 787 Dreamliner, because thousands of U.S. aviation officials needed to certify the planes have been idled.

Any delays would likely affect the plane maker's newest models and could affect development of other models such as the stretched 787-9 derivative, the company said.   Continued...