Shutdown hits local businesses, large and small -- Gazette.Net


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From large contractors to hotels, the continued federal government shutdown is having its effect locally.

The shutdown, which started Oct. 1, is even causing CEOs of large companies to blog about it.

“With the major attractions of the city and government offices closed, tourism and business travel [in the Washington, D.C., region] is declining,” Arne Sorenson, CEO of Bethesda hotel giant Marriott International, said in a post on his LinkedIn page. “Visitors applying for visas to come to the United States for business or pleasure will likely see delays. The e-verify system, which verifies the work eligibility of employees, has been pulled down, leaving employers without a key resource when trying to be sure that a job offer can be extended.”

Across the country, hotels collectively are losing more than $8 million a day during the shutdown because of lost tour and travel business, according to the American Hotel and Lodging Association.

Sorenson said he is considering not making political contributions to any party and Congress members who have “perfect or near perfect scores” from conservative or liberal groups.

“Can we collectively shift the money that is in the political process to politicians who are practical and who are not above doing the work of politics to reach practical solutions, especially in the areas where political philosophies conflict?” he asked.

The standoff continues as many congressional Republicans want to see deeper spending cuts and changes to the 2010 health care reform law, like the individual mandate being delayed. Likewise, many congressional Democrats and the Obama administration say there have been enough cuts and they do not want to change the law.

Restaurants that rely on federal workers for lunch business and even auto dealers are seeing much fewer customers these days, U.S. Sen. Barbara A. Mikulski (D-Md.) said during an address Thursday on the Senate floor.

“Small businesses are what help make America great,” she said. “This ripples through our economy.”

The shutdown is particularly hurting agencies like the National Institutes of Health in Bethesda, Mikulski said. “It is having a terrible impact on the Maryland economy,” she said. “When you talk to small businesses where these agencies are located, it is just terrible.”

Lockheed starts furloughs

Bethesda defense giant Lockheed Martin started furloughing about 2,400 employees companywide on Monday because of the political standoff.

The number of sidelined employees was 600 fewer than what Lockheed officials thought on Oct. 4 they would be furloughing. After Defense Secretary Chuck Hagel said on Saturday that most of the roughly 400,000 civilian employees in that department had been deemed essential for national security, Lockheed officials decided to reduce the number of furloughs.

Most of those affected work in civilian programs in the Washington region, said Gordon Johndroe, a Lockheed spokesman.

The furloughs at Lockheed — which has about 5,000 employees in Montgomery County — include employees who cannot work because a government facility where they work is closed. It also covers employees whose duties require a government inspection that cannot be completed or whose worksite has received a stop order.

Lockheed is directing affected employees to use their vacation time to continue to receive pay and benefits.

“I’m disappointed that we must take these actions, and we continue to encourage our lawmakers to come together to pass a funding bill that will end this shutdown,” Lockheed CEO Marillyn A. Hewson said in a statement. “We hope that Congress and the administration are able to resolve this situation as soon as possible.”

In fiscal 2012, Lockheed was the federal government’s largest single contractor, with $37 billion in contract money obligated to the company, according to federal figures.

Lockheed received about 82 percent of its revenue of $47.2 billion last year from the U.S. government, including 61 percent from the Department of Defense, according to its 2013 annual report. Some 17 percent came from international customers and 1 percent from private and other clients.

Another Bethesda company could see effect

Bethesda enriched uranium supplier USEC potentially could have to furlough some employees — or at least slow down the work — at an Ohio uranium enrichment project if the shutdown runs past Oct. 15, USEC spokesman Paul Jacobson said.

USEC is building the $350 million plant to produce low-enriched uranium to make nuclear fuel. The project is about 80 percent funded by the U.S. Department of Energy. The government has provided $227 million for the project.

USEC needs about $48 million more to complete the plant and is negotiating with Congress and the administration to obtain the rest of the funding by Dec. 31. The longer the shutdown continues, the more difficult it is to maintain operations, officials said.

“Failure to reach agreement on a budget by the middle of the month has the potential to severely impact the uranium centrifuge program we’re running in Ohio and Tennessee — emphasis on ‘potential,’” Jacobson wrote in an email.



kshay@gazette.net