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A Ute tribal enterprise is falling victim to circumstance as the federal government makes cutbacks in the defense industry.

Last week Ute Indian Machine and Manufacturing was forced to furlough 10 employees due to a lack of work. Just prior to that round of layoffs, 19 people were furloughed.According to production manager Sam Cooper, the remaining 16 employees are finishing up contracts on the shipping and storage containers for weapons and guidance systems that Ute Manufacturing began producing after opening four years ago.

Cooper is out of a job himself under the terms of a mutual agreement in an effort to cut overhead costs. He was brought in by tribal leaders two years ago under a three-year management contract to dig the fledgling company out of a deep financial hole left by original owners and managers and mend relations with suppliers and customers.

Last year Ute Manufacturing did $1.5 million worth of business. But because of the uncertain defense budget so far in 1992, its work force has fallen from 47 employees to just 16. At one time the company employed as many as 78 people, the majority of whom were Ute tribal members.

"It's not that we're closing, it's just that we're at a point now that the contracts we have are being finished and we have no other choice but to place workers on furlough," explained Ute Manufacturing board member Keith McDonald.

The remaining employees have an estimated weeks' worth of work left, unless the government begins moving on awarding bids that were expected to be opened months ago.

"We have $1.7 million worth of bids we're waiting to receive word on. We have been notified that were the apparent low bidder on a $100,000 contract, and another $550,000 is expected to be awarded any day. However, until the work actually materializes the company has no choice but to furlough workers as existing orders are filled, Cooper stated."

He said because manufacturing is cyclical, workers are typically laid off and then called back. And he points out that the recent furloughs don't spell death for the company.

"Our customers are getting their products, and our suppliers are being paid. We've built an impressive base of clients. Texas Instruments has praised us on our workmanship and the quality of the (missile) container. They've been strong backers, and they've helped us get things equipment-wise. We've also just qualified to do work for McDonnell Douglas, and we're doing our first work for Geneva Steel."

In addition to the uncertain defense budget, the company was dealt another blow recently when the Small Business Administration denied its application for "8-a status." Had Ute Manufacturing been awarded the special minority designation, it would have been able to negotiate on contracts rather than go through the competitive bidding process.

"It was quite the blow to us. We had worked on our application for a year and a half. They listed five reasons for denial, and four of them have been cleared. Now we're stuck on one," Cooper said.

He hopes the remaining hurdle for the company will be overcome by his termination.

"The SBA turned us down because I'm the manager and I'm not a member of the Ute Tribe. Under my contract I had been training a tribal member to take over as manager. But it takes time. Ute Manufacturing is 100 percent owned by the tribe. But many times a minority doesn't have qualified people to run the operation."