Firms warn of consequences of prolonged budget impasse.Friday 11 October 2013 12.34
As the US government moved into the second week of a shutdown, President Barack Obama has invited Republicans and Democrats in Congress to meet to try and resolve the political impasse that is threatening financial havoc.
The following is a list of companies and financial institutions that have warned of project delays, employee layoffs and other consequences of a prolonged budget impasse.
** URS CORP - The engineering company said it has temporarily laid off about 3,000 employees due to the US government shutdown. The number, as of Monday, is expected to increase if the shutdown continues, said URS, which counts the US Defence, Homeland Security, State and Treasury departments as customers.
** BAE SYSTEMS - The British defence contractor said about 1,200 employees from its intelligence & security and support business have been temporarily told not to report to work. The government shutdown in the US had not made any material impact to BAE's overall financial performance but it warned of the impact on its US operations should it not be resolved.
** COSTCO WHOLESALE CORP - The US warehouse club retailer has seen a "downward" effect in the Washington, DC area due to the government shutdown, but not overall, chief financial officer Richard Galanti said on a post-earnings conference call.
** HEALTH NET - The managed care company said payments for healthcare services it provides to military families would be delayed due to the US government shutdown. The US Defence Health Agency (DHA) said on October 2 that it would not be able to reimburse the company as it did not have the legal authority, Health Net said in a regulatory filing.
** HUMANA - The managed care company said the government shutdown would delay payments related to its military health services contract and that it could be liable for up to $175m worth of claims if the payments do not come through. Humana provides administrative services to the government for healthcare, with the federal government covering the cost of the benefits and associated risk.
** LOCKHEED MARTIN CORP - The weapons maker said it would lay off about 2,400 of its workers, fewer than the 3,000 it had expected, because the government facilities where they work are closed due to the shutdown or the company had received a stop-work order on their programme. The number of employees was expected to increase every week if the shutdown continued, the company said on Friday.
** UNITED TECHNOLOGIES - The diversified manufacturer cancelled plans to temporarily lay off workers in its aerospace businesses as government quality inspectors return in the wake of the Pentagon's decision to recall most its own laid off civilian workers. The company, which makes Sikorsky helicopters and other items for the military, had said last week that it could lay off as many as 4,000 workers in its aerospace businesses if the shutdown continued through this week and possibly nearly 5,000 if the shutdown continued into November.
** BOEING - The aerospace and defence company said there could be delays in its jetliner deliveries, including its new 787 Dreamliner, because thousands of US aviation officials needed to certify the planes have been idled. The delays would also affect numerous programmes and products in the company's defence business.
** WAL-MART STORES - The retailer's Sam's Club chain saw a slight slowdown last weekend at its warehouse club stores near government facilities but anticipates it could see a lift in food sales if military commissaries remain closed, the unit's CEO, Rosalind Brewer, told Reuters. The chain is offering military families and retirees free access to its stores while the military commissaries remain closed, Brewer said.
** USEC - The uranium fuel supplier, which is awaiting funds from the US government for an enrichment project, said it may have to lay off some workers or slow down work at the project if the shutdown extends past October 15.
*** BANKS - Chief executives from major financial institutions have warned of "adverse" consequences if US government agencies remain closed and lawmakers fail to raise the debt ceiling by the middle of October. In a meeting with Obama, Goldman Sachs Chief Executive Lloyd Blankfein implicitly criticised Republicans for using their opposition to the healthcare law as a weapon that could lead to a US default.