Mon, Oct 14, 2013 - Page 15 News List

US shutdown may necessitate layoffs: Boeing

FALLOUT FURLOUGHS:The layoffs will affect its Defense, Space & Security unit. Meanwhile, JPMorgan Chase’s head said a default would be catastrophic

AFP, WASHINGTON

Boeing on Saturday said it may have to send home workers in its defense, space and security unit without pay if the US government shutdown in a budget battle continues.

“While the company is working to limit the negative impact of the shutdown on customers and employees, we expect some consequences could emerge in the coming days, including limited furloughs of employees in some areas,” the company said in an e-mail. “At this time, we expect the furloughs to be limited to employees in Boeing Defense, Space & Security.”

The US aerospace and defense giant’s announcement came as the partial federal government shutdown ground through a 12th day with no sign of a political budget deal to end it, and as the nation careened toward a Thursday deadline to raise the debt ceiling or face a catastrophic default.

Boeing said the furloughs would be ordered “as a result of customers issuing stop work orders, limiting access to federal installations where Boeing employees work, and curtailing government inspections or eliminating funds to continue operations.”

The Chicago-based company did not say how many employees it could furlough from Boeing Defense, Space & Security, which has 59,000 employees worldwide.

Boeing also said the shutdown was negatively affecting activities such as for NASA and other government customers, and that it was continuing to work with its customers and suppliers to maintain normal operations in as many parts of its business as possible.

JPMorgan Chase and Co chairman, president and chief executive Jamie Dimon warned on Saturday that the US needs to avoid defaulting on its debt, saying the possible repercussions are unfathomable.

“You don’t want to know,” Dimon said when asked what would happen if the US is forced into default because the US Congress did not raise the country’s borrowing limit.

“It would ripple through the world economy in a way that you couldn’t possibly understand,” he said at a discussion held by the Institute of International Finance, a leading forum for the world’s banks.

He said it would shock the money market, where trillions of US dollars in cash are invested in ostensibly top-quality securities like US debt based on expectations that the borrowers will not default.

“You don’t know the ripple effect of that through money-market funds,” said Dimon, head of the largest US bank by assets. “The money markets are the most fickle markets in the world, they’re like a rabbit.”

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