Military contractor Sikorsky Aircraft, a division of United Technologies Corp (NYSE:UTX), has canceled temporary layoffs that had been scheduled to start on Monday, due to the U.S. government shutdown, spokesman Paul Jackson said on Sunday.
The move, reported earlier by the Wall Street Journal, came in the wake of the decision by Defense Secretary Chuck Hagel to recall most of the Pentagon's own furloughed civilian workers.
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United Technologies was one of several manufacturers that had warned of furloughs and delays in the deliveries of products as a result of the federal budget impasse. Many rely on federal workers to inspect and approve their products, or receive government funding for some of their operations.
Sikorsky, a large military contractor that makes Black Hawk and Seahawk helicopters and other aircraft for all five branches of the U.S. armed forces, had announced last week that it would lay off nearly 2,000 workers beginning Monday, and possibly as many as 5,000 if the shutdown continued into November.
Sikorsky's Jackson called Hagel's decision "a surprise," and termed the company's cancellation of furloughs "great news."
Other big defense contractors adopted a wait-and-see attitude.
Gordon Johndroe, vice president of worldwide media relations of Lockheed Martin Corp <LMT.N>, said "it's too early to tell" whether the company will carry out plans, announced last week, to furlough some 3,000 employees beginning on Monday. "We'll continue to be in close contact with the Pentagon and are hopeful that our programs and contracts can move forward."
On Friday, Lockheed Martin announced that the number of employees who faced furlough as a result of the government shutdown is expected to increase weekly in the event of a prolonged shutdown. The affected employees include those unable to work because the government facility where they perform their work is closed, because their work requires a government inspection that cannot be completed, or because the company received a stop-work order.
Lockheed's military products range from the F-16 Fighting Falcon to missile defense systems.
Aircraft maker Boeing Co <BA.N> said last week that it expected any furloughs to be limited to employees in Boeing Defense, Space & Security, possibly beginning as early as this week.
"We have not received any information from our defense customers about plans to reinstate part of their workforce," spokeswoman Meghan McCormick said on Sunday, "therefore it would be inappropriate to speculate about what it might mean for Boeing employees and operations."