US shutdown affecting businesses
Is the US shutdown affecting businesses? Yes, says Commerce Secretary Penny Pritzker, who is at the APEC (Asia-Pacific Economic Cooperation) Summit in Bali, Indonesia.
President Barack Obama, who had planned to be at the APEC Summit, cancelled the trip because of the shutdown.
What happens in the United States affects all of us, Philippine President Benigno Aquino said.
Lockheed Martin, a US defence contractor had to lay off (furlough) 3,000 employees without pay on Friday.
At midnight on October 1st the US government started the federal shutdown after the House of Representatives refused to approve a budget for the coming year. All non-essential services were closed down and hundreds of thousands of workers were furloughed without pay.
Ms Pritzker said:
“The shutdown is not good for business. It’s not good for the economy.”
Regarding the Commerce Department’s publications of economic data during the shutdown, Prizker added:
“We’re a huge source of data for American business and that is a problem… It’s affecting businesses and it’s affecting their ability to get data.”
US shutdown affecting Lockheed
Lockheed warned the initial figure of 3,000 staff being made to go on leave will rise if the shutdown continues.
Lockheed’s chief executive and president, Marillyn Hewson said “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. We hope that Congress and the Administration are able to resolve this situation as soon as possible.”
US shutdown affecting United Technologies
United Technologies Corp., a defense contractor that is well known for making the Blackhawk helicopters, announced it is placing nearly 2,000 Sikorsky workers on furlough at its facilities in Stratford, Connecticut; West Palm Beach, Florida; and Troy, Alabama.
The company also warned that if the shutdown carries on it will have to furlough thousands more workers due to the absence of DCMA (Defense Contract Management Agency) inspectors who check and approve operations throughout the manufacturing process for military goods.
United Technologies wrote “If the shutdown continues through next week, UTC’s Pratt & Whitney and UTC Aerospace Systems units would also be affected, and company-wide furloughs are expected to double to include 4,000 workers. This number could exceed 5,000 employees if the government shutdown continues into next month.”
US shutdown affecting other businesses
Boeing says deliveries of its 787 Dreamliner passenger airplane could be delayed because thousands of aviation officials who certify that the planes have been idled have been laid off.
USEC Inc, a company that supplies enriched uranium to nuclear power stations said it might have to lay off some workers at its enrichment project in Ohio if the shutdown carries on after October 15th.
USEC’s $350 million American Centrifuge project is 80% funded by the Department of Energy. The company needs $48 million to complete the project.
Reports from various media say supermarkets, construction companies and mortgage lenders are reporting lower activity.