United Technologies Cancels 4,000 Potential Staff Furloughs

United Technologies Corp. (UTX), the sixth-largest U.S. government contractor, reversed plans to furlough as many as 4,000 workers after the Pentagon said most civilian employees sent home in the federal shutdown will be put back to work.

The Hartford, Connecticut-based company had planned to put 2,000 workers on leave beginning tomorrow at its Sikorsky Aircraft unit, which makes Black Hawk helicopters, after military inspectors required to monitor production work were put on leave. Another 2,000 workers at the contractor’s Pratt & Whitney and UTC Aerospace Systems had faced furloughs if the shutdown extended into this week.

The Pentagon now says 90 percent or more of about 350,000 workers it furloughed last week will be coming back, including inspectors who review contracted work. United Technologies was the first of the top military contractors to reverse furloughs, while other vendors, including Bethesda, Maryland-based Lockheed Martin Corp. (LMT), hadn’t called off plans to put staff on leave as of 6 p.m. in Washington.

“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.

Photographer: Chris Ratcliffe/Bloomberg

United Technologies Corp.’s Sikorsky Aircraft unit, which makes Black Hawk helicopters, had planned to put the workers on leave tomorrow due to the partial government shutdown. Close

United Technologies Corp.’s Sikorsky Aircraft unit, which makes Black Hawk helicopters,... Read More

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Photographer: Chris Ratcliffe/Bloomberg

United Technologies Corp.’s Sikorsky Aircraft unit, which makes Black Hawk helicopters, had planned to put the workers on leave tomorrow due to the partial government shutdown.

Robert Hale, undersecretary of defense, said 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 call yesterday. “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 tomorrow. It’s still too early to tell if those plans will change, said Gordon Johndroe, a spokesman for the company.

“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

Many 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 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 immediate comment on whether any of its workers may be reinstated or protected from the government closing after the Pentagon decision.

Intelligence Personnel

“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.

Boeing Co. (BA), 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.

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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