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Friday, October 4, 2013

FAA Furloughs Pose Huge Risk to Smaller Aviation Companies

Woodrow Bellamy III

Smaller aerospace companies are feeling the biggest impact the federal government shutdown within the aviation industry, which entered its fourth day on Friday, as suppliers and manufacturers are finding their operations stalled by their inability to get new aircraft and aircraft components certified and registered because of FAA furloughs. 
 
Congress remains divided over a continuing resolution to fund the government, keeping more than 800,000 federal workers and more than 15,000 FAA employees furloughed. The agency has furloughed all but 100 of its 1,200 certification inspectors, with the remaining workers not able to initiate any new certification projects and support smaller companies that directly rely on FAA for design approvals, according to a statement issued by Aerospace Industries Association (AIA) President Marion Blakey on Friday.
 
Jens Hennig, vice president of operations for the General Aviation Manufacturers Association (GAMA) said his organization identified 12 deliveries that were scheduled for the first two days of October that have been delayed due to the furloughing of workers at the FAA Aircraft Registry office in Oklahoma. Companies cannot complete these deliveries without approval and registration from FAA.
 
Furthermore, if the shutdown persists over the next several weeks, GAMA has identified 123 aircraft deliveries by its member companies that are scheduled for delivery during the first half of October at an estimated value of $1.38 billion.
 
"The fourth quarter is our peak time for aircraft deliveries and typically accounts for 35 percent of annual aircraft deliveries for the general aviation manufacturing industry," Hennig said in an emailed statement. 
 
"Our members are also concerned about  the Aircraft Registry's ability to clear a backlog in case the shutdown lasts more than a few days which could potentially impact the industry’s fourth quarter deliveries," Hennig added. 
 
Larger aerospace manufacturers are feeling the impact as well. United Technologies Corp. (UTC), which reported it employs about 83,000 U.S. workers as of the end of last year, issued a statement Wednesday indicating it will be forced to furlough about 2,000 workers from its Sikorsky Aircraft unit on Monday. 
 

"This number could exceed 5,000 employees if the government shutdown continues into next month," UTC said.  

Lockheed Martin also announced Friday that it would be furloughing 3,000 employees on Monday as a direct result of the government shutdown. The aerospace and defense giant said employees being furloughed work at government facilities that are closed because of the shutdown, and expects the number of furloughed workers to increase weekly as the shutdown persists.

"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," said Marilyn A. Hewson, Lockheed Martin Chief Executive Officer and President. "In an effort to minimize the impact on our employees, we are directing affected employees to use available vacation time so they can continue to receive their pay and benefits. We hope that Congress and the Administration are able to resolve this situation as soon as possible." 

 

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