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PROVIDENCE – The recession has forced Textron Inc. to cancel development of the Citation Columbus wide-body jet, and the Providence-based conglomerate will take a $43 million non-cash pre-tax charge to write off the cost, according to a regulatory filing.
Textron (NYSE: TXT) said it spent a total of roughly $50 million in capitalized tooling and facility costs and other expenditures on the intercontinental jet before the project was formally canceled earlier this month.
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Textron determined that it will have to write off more than 85 percent of the project’s sunk costs, including an unfinished factory in Wichita, Kan., and equipment with no alternate use.
Textron subsidiary Cessna Aircraft, which was in charge of the project, also will return $10 million by the end of the month to the governments of Wichita and Sedgwick County, Kan., The Wichita Eagle reported, based on details in an 8-K filing by the company. The money was part of a $70 million package of tax breaks the company received last year to locate the project in Wichita.
Wichita Mayor Carl Brewer told the Wichita Business Journal that has city was “just really disappointed” that the project has been canceled.
Textron will release its second-quarter earnings report on July 28. The company’s first-quarter profit was down 63 percent compared with a year earlier.
