The federal government’s shutdown is affecting some of Washington state’s smaller aerospace companies, even though the Boeing Co. (NYSE: BA) so far has been unscathed.
Cub Crafters Inc., which makes light single-engine aircraft in Yakima, is running out of its authority delegated by the Federal Aviation Administration to deliver airplanes. Unless there is a change, the 140-person company will lose its ability to deliver aircraft next week, said CEO Jim Richmond.
Many FAA employees have been furloughed by the government shutdown.
“We can’t operate without the FAA,” Richmond said. “We haven’t stopped work yet, but we won’t be able to deliver any we’re making after next week.”
Normally his company delivers seven or eight aircraft a week, he said. He expects the shutdown to start impacting cash flow next week, although employees currently are continuing to build aircraft.
In Seattle, Clay Lacy Aviation, an aircraft sales and charter company at Boeing Field, is ready to deliver a 12-passenger Bombardier business jet, worth about $3 million. But the company can’t close the transaction without finalizing it with the FAA registry in Oklahoma City, said Brad Wollen, vice president of aircraft sales.
So the used aircraft, ready to be sold to an overseas buyer, is instead sitting on the tarmac at Boeing Field in Seattle.
“Those (FAA) people now are out on furlough, nobody can buy or sell an airplane in the United States,” Wollen said.
This transaction is just one of 10,000 transactions monthly that require filing with the registry office, said Ed Bolen, president and CEO of the National Business Aviation Association, in an interview.
“One day, two days, are bad, but as this goes on the problems begin to grow exponentially,” Bolen said. “This is quickly becoming a pretty dire situation.”
Boeing’s defense-related operations in the Puget Sound area could also be vulnerable, although it’s unclear if there has been any effect here yet. The company holds numerous federal contracts.
“While the company is working to limit the negative impact of the shutdown on customers and employees, we expect some consequences could emerge in the coming days, including limited furloughs of employees in some areas,” said spokeswoman Meghan McCormick in a prepared statement. “At this time, we expect the furloughs to be limited to employees in Boeing Defense, Space & Security,” which is the company’s defense-related division.
Several thousand people work in that division in the Puget Sound area.