The much anticipated Cessna Citation Columbus business jet appears to now be only a dream. Cessna's parent company, Textron, has filed a brief with the Securities and Exchange Commission that states the Citation Columbus program has been killed.
Earlier this year, Cessna announced that the program would be put on hold due to poor aviation business jet market conditions.
Meanwhile, city and county leaders seem to have different opinions as to what they will do with the $10-million that Cessna will return to Wichita and Sedgwick County. The company was given the money in order to entice it to build the plant in Wichita.
"Some of us on the County Commission want to finish rolling back the 2.5% mil levy tax increase from a couple or three years ago," said County Commissioner Gwen Welshimer. "This will help that. We need $6-million to roll it back another mil-and-a-half.
But City Council member Sue Schlapp says we shouldn't move too quickly to spend the money.
"I want us to be very careful as we say we're going to get that money back," she explained. "Let's have an eye to the fact that it was difficult to get that package done in the first place. Let's not totally put it off the table and have a positive attitude for Textron and Cessna that we'll have that money for them if they decide to build in the future."
What follows is the official wording of the filing with the SEC:
Item 2.06 Material Impairments.
As previously reported in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2009, subsequent to the end of the first quarter, we decided to suspend the development of the Citation Columbus wide-body jet due to prevailing market conditions. Upon additional analysis of the business jet market related to this product offering, we decided to formally cancel further development of the Citation Columbus. As referenced in our first quarter 10-Q, we have approximately $50 million in capitalized tooling and facility costs and other deferred costs related to the Columbus. Accordingly, we have reviewed these assets for recoverability in accordance with generally accepted accounting principles. On July 8, 2009, management of Textron Inc. concluded that a material impairment charge was required related to the recoverability of a significant portion of the partially-constructed manufacturing facility in Wichita, Kansas and certain tooling capitalized for the project that has no alternate use. Accordingly, Textron will record a non-cash pre-tax charge of approximately $43 million for the three and six months ended July 4, 2009 to reflect the impairment of the facility and the tooling assets. This non-cash impairment charge is not expected to result in any future cash expenditures.