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Boeing Could Furlough Workers if Shutdown Persists

Its customers may have to delay orders


government shutdown 630The on-going U.S. government shutdown could force aircraft giant Boeing (BA) to begin scaling back operations.

On Sunday, a Boeing spokesman said that disruptions resulting from the suspension of non-essential government operations — which is on the verge of entering its third week — could cause furloughs at its defense, space and security business, which generated 40% of the company’s $81.7 billion annual revenue last year. The company said it is cooperating with its clients and vendors to maintain support for operations, Bloomberg notes.

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Furlough notices could go out if Boeing customers begin delaying orders due to a cutoff of federal funds for projects or an inability to access required federal facilities or agencies. Boeing indicated that furloughs affecting an unspecified number of workers could be issued this week.

The U.S. government shut down on Oct. 1 after congressional Republicans and the White House failed to negotiate an agreement over GOP attempts to tie funding bills to President Barack Obama’s Affordable Care Act.

Last week, reports indicated that aircraft deliveries from Boeing to some airlines were being delayed by the closure of the Federal Aviation Administration’s registry office.

Shares of Boeing fell modestly in Monday morning trading.

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