Coronavirus hits defense contractor jobs
The aerospace industry is buckling under the strain of the coronavirus pandemic.
The worsening outbreak has prompted top defense contractors like Boeing, GE Aviation and Textron to shutter production lines and lay off thousands of workers as commercial air travel nearly grinds to a halt.
That’s put more than 500,000 aerospace production jobs at risk, according to the International Association of Machinists and Aerospace Workers in a warning to lawmakers this past week.
Some help is on the way, though. The $2 trillion coronavirus relief package signed into law by President Trump on Friday sets aside $17 billion in federal loans for “businesses critical to maintaining the national security,” and the Pentagon recently declared defense contractors as “critical” to national security, saying they must continue to report to work.
But the Defense Department can only do so much to ensure manufacturing lines stay up and running in the near term, and officials have said to prepare for some shortcomings.
“I do expect there will be some delay and disruption” to aircraft production, top Navy acquisition official James Geurts told reporters Wednesday.
Here are the top defense companies that have been hardest hit by the coronavirus.
Boeing
Boeing on Monday announced it would shutter airplane production in the Seattle area for 14 days starting March 25.
The shutdown took place at “sites across the Puget Sound area,” where roughly 70,000 workers build aircraft like the Air Force’s KC-46 aerial refueling tanker and the Navy’s P-8 Poseidon submarine hunters.
Perhaps the most vocal company in advocating for government relief to aerospace firms, Boeing earlier this month sought a $60 billion rescue package from Washington for the firm and its suppliers.
Though the company is not expected to receive a bailout of that amount, it is expected to take the lion’s share of the $17 billion set aside for defense firms in the coronavirus bill.
GE Aviation
GE Aviation, which makes engines for military aircraft, announced Monday it was cutting 2,600 employees – 10 percent of its workforce.
In addition, about half of its U.S. maintenance, repair and overhaul employees will be furloughed for three months. The company also implemented a hiring freeze and canceled salary increases.
Textron
Textron on March 18 announced a staggered four-week furlough of 7,000 employees – most based in the U.S. – beginning March 23 and lasting until May 29.
The firm, which makes the Beechcraft T-6 trainer used for Air Force pilot training, among other aircraft, said the furloughs are an attempt to stop the spread of coronavirus but insisted it “will continue to support our Defense customers according to our funded contract requirements.”
In addition to the furloughs, the company said in a statement it is also “limiting large group meetings, increasing daily cleaning of its facilities, restricting travel, and cancelling our participation in several global meetings and events.”
Honeywell
Charlotte, N.C.-based Honeywell, which makes airplane cockpit systems, is cutting hours for some employees or forcing them to take unpaid leave “based on customer demand,” the Charlotte Observer reported Thursday.
In addition, the firm is slashing base pay and bonuses in order to “keep rather than eliminate jobs.”
Lockheed Martin
Lockheed, which manufactures the F-35, saw work stop in early March at its fighter-jet factory in Japan due to coronavirus concerns.
The company has a factory in Ft. Worth, Texas, as well as two final assembly facilities in Japan and Italy, where the two U.S. allies assemble the jets for their own use.
The company’s Italian plants faced severe restrictions as the country went into lockdown mode, but its facilities have since reopened after they were cleaned and sanitized.
Stateside, an employee at Lockheed’s 2,000-worker plant in Sunnyvale, Calif., tested positive for coronavirus this month. The firm instructed employees “to avoid travel to or through specific areas in Asia and Europe,” and limited other international and domestic travel for business purposes.
But on Friday Lockheed said it would move forward with its planned recruiting and hiring. It also made a combined advance payment of $50 million to its small- and medium-sized suppliers “to ensure they have the financial means to continue to operate, sustain jobs, and support the economy.”
General Dynamics
General Dynamics, the parent company of Navy shipmaker Bath Iron Works, has been called on by unions to shutter its Maine shipyard for two weeks and give paid time off to its 8,000 workers due to coronavirus concerns.
The company has said it will allow workers to take up to 80 hours of unpaid leave during the pandemic.
Meanwhile, General Dynamics Mission Systems in Pittsfield, Mass., which employs 1,600 people, remains open after an employee this month tested positive.
Thales
Defense contractor Thales laid off 128 employees in Irvine, Calif., who work for its aviation arm Thales Avionics, The Los Angeles Times reported Thursday.
In a statement, Thales said that in order to minimize the spread of the virus it “is following the directives of the governments of its countries of operation, adapting its working practices in line with the recommendations of the health authorities, and instructing employees to work from home whenever possible.”
United Technologies Corp.
United Technologies (UTC), which makes Pratt & Whitney engines as well as cockpit controls and communications systems, announced Tuesday it had initiated a hiring freeze, deferred employee bonuses and suspended nonessential spending.
The firm also said it will impose a “significant reduction” in capital investment in buildings and facilities.
“These steps are difficult but necessary to protect UTC’s ability to weather this rapidly evolving crisis and are similar to the steps we took in past crises, representing a global shared sacrifice in the face of these challenging times,” CEO Greg Hayes said in a statement Tuesday.