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U.S. shutdown could mean delays for LI defense firms

The assembly floor at Telephonics, a Farmingdale-based electronics

The assembly floor at Telephonics, a Farmingdale-based electronics defense contractor with about 1,100 Long Island workers. Chief executive Joseph Battaglia said if the federal shutdown lasts a month, there could be delays in the initiation of new contracts and in federal inspections of shipments of hardware. Photo Credit: Kevin P. Coughlin, 2010

Long Island defense company executives said shipments to their customers -- and payments to their companies -- could be delayed if a partial shutdown of the federal government lasted more than a few weeks.

At Telephonics Corp., a Farmingdale-based electronics defense contractor with about 1,100 Long Island workers, chief executive Joseph Battaglia Monday called the effect of a shutdown lasting a few days "absolutely nothing."

But, said Battaglia, if the shutdown lasts a month, there could be delays in the initiation of new contracts and in federal inspections of shipments of hardware ready to go -- in both cases because of furloughs of federal civilian employees. In some cases, delays in shipment can mean delays in payments, local defense executives said.

One previous partial government shutdown, in the 1990s, lasted for three weeks.

Any impact from a government shutdown would come atop the effects of the federal "sequestration" budget cuts in the spring. In May, four local companies blamed the cuts for declines in revenues or profits: CPI Aerostructures. of Edgewood, Air Industries Group of Bay Shore, Aeroflex Holding Corp. of Plainview and Globecomm Systems Inc. of Hauppauge.

At Central Machining Specialties, a West Babylon maker of parts for aircraft and ships, president and chief executive Nick Lore laid off two workers in the spring because of the sequestration. He said that while payments to him directly from the government might be delayed, most payments, coming from prime contractors or subcontractors, should continue on time: "I think [the shutdown] could go on for six months without any major effects."

At Air Industries, which employs about 250, chief executive Peter Rettaliata, said, "I don't expect there to be an immediate impact if the government shuts down. I think the problem will be resolved before it has any kind of impact."

And at B & B Precision Components, a Brentwood maker of spare parts for aircraft employing five people, chief executive August Bricker said he, too, was somewhat worried about delayed inspections if a shutdown lasted for more than two weeks. "It will affect me a little," he said.

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