Boeing "evaluating the potential impacts" of US government shutdown (Update1)

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Boeing "evaluating the potential impacts" of US government shutdown (Update1) By

Jon Ostrower  on April 7, 2011 7:45 PM | Permalink | Comments (7) | TrackBacks (0) |
Yesterday, I submitted a series of questions to Boeing about what impact, if any, a government shutdown would have on the aircraft maker. The US government will shut down at 12:01 AM on April 9 if no continuing budget resolution (or permanent budget) compromise is found, meaning that non-essential federal employees will be on furlough until a solution is found. This includes many personnel at the US Federal Aviation Administration who are neither law enforcement or responsible for the protection of property and safety.
According to the Washington Post, who cites an agency official: (Big hat tip to Chris)

...the FAA will retain all employees necessary to keep the national airspace system operating safely. However, non-critical safety functions would be suspended including aircraft certification, the development, testing and evaluation of NextGen technologies and most budget and administrative activities.

Boeing is currently operating four major simultaneous certification campaigns, three of which are for new aircraft types. The 787 Dreamliner, 747-8 freighter and 747-8 Intercontinental, as well as the 737 paired with CFM56-7BE engines are all currently undergoing certification.
Both the 737 and 747-8 freighter are expected to achieve certification in April and June, respectively prompting the nearer-term need for FAA resources to validate and sign off on tests. Though the 787 may have the most breathing room with its delivery window opening in late-July and progressing through the end of the third quarter in September. Only the 747-8I, which began its flight test program on April 20, has not yet begun to fly for Federal Aviation Administration certification credit.
Inside the factory FAA personnel assist in signing off on assembly operations, though what role Boeing's FAA authorized representatives (ARs) and delegated engineering representative (DERs) play in signing off on manufacturing work is unclear to this outsider.
The response I received from Boeing this afternoon is as follows:

Boeing is evaluating the potential impacts of a government shutdown, if that's what comes to pass. However, until a shutdown is declared, we won't speculate on impact.

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7 Comments By Chris
on April 7, 2011 8:27 PM | Reply

The Washington Post says this about the FAA

"FEDERAL AVIATION ADMINISTRATION

According to an agency official, the FAA will retain all employees necessary to keep the national airspace system operating safely. However, non-critical safety functions would be suspended including aircraft certification, the development, testing and evaluation of NextGen technologies and most budget and administrative activities."

Can be found here: http://www.washingtonpost.com/blogs/federal-eye/post/government-agency-shutdown-plan-details-what-is-my-agencys-plan-if-the-government-shuts-down/2011/04/07/AFZZZVuC_blog.html?hpid=z2#faa

By Aero Ninja
on April 8, 2011 1:48 AM | Reply

Has the federal government ever been shut down in the past? How likely is this to happen? Is this just the press getting a bit worked up and making a big thing out of not much?

If, though, the threat is real, it looks like a real head in the sand attitude for Boeing, if they really are not evaluating the impact of such an event.

I am sure there are many analysts who are doing so, and will soon be making their evaluations public.

By Uwe
on April 8, 2011 5:06 AM | Reply

Took this for a delayed April Fools bit first.

Can Boeing lay out the funds required to keep
certification relevant personel at their work?

By Steve
on April 8, 2011 11:35 AM | Reply

If cert activities are unfunded then all FAA witnessed flight testing will not be possible. On the other hand the ARs at Boeing will continue their work as the are paid by Boeing.

By Anonymous
on April 8, 2011 11:46 AM | Reply

All Boeing employees, including those done by BDCO, the FAA delegation branch of Boeing, will continue to go to work.

I do not know the details ... I wonder if the FAA can continue to delegate non-critical Certification tests? The tests that the FAA have already written off as delegated perhaps can still claim credit towards. But some testing, like S&C testing on RC001, will be delayed.

By Tim Raetzloff
on April 8, 2011 1:36 PM | Reply

First, the shutdown is unlikely to go on more than a couple of weeks. Someone will blink.

Second, the effect on Boeing may be minimal in flight test operations. Boeing could use more catch-up time; the schedules still look tight to me. An FAA shutdown delay doesn't damage Boeing credibility in any way and does provide wiggle room if schedules aren't met.

The joker is that if deliveries of current production lines are delayed (I don't think they will be as I understand it, but I admit I don't know and haven't found anyone who is certain) the cash flow starts to squeeze in just a few weeks.

The Boeing response to the question is measured and reasonable.

By JIM HELMS
on April 8, 2011 6:18 PM | Reply

AS NOTED, HAVING SOMEONE TO BLAME DOESN'T HELP CASH FLOW!

PJ

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