Textron Aviation said Thursday that it has reached a modified agreement with the state of Kansas, which includes a commitment to build its new Cessna Citation Longitude business jet in Wichita and keep development of future turboprop aircraft here.
Textron Aviation said in a news release that the “restated Workforce Services Training Agreement … will support hundreds of millions of dollars of investment in new product development and production” in the city.
“The revised agreement takes into account the company’s significant investment in facilities and programs based in Kansas and particularly the Wichita area,” Jim Walters, Textron Aviation senior vice president of human resources and communications, said in the release.
Parent company Textron Inc. has invested more than $2 billion in Textron Aviation since 2011, according to the release. That includes Textron Inc.’s $1.4 billion acquisition of Beechcraft in 2014.
The Longitude would be Textron Aviation’s newest business jet. It’s unclear at this point when production on the aircraft would begin and whether it would mean any new jobs for Wichita.
Textron Aviation is expected to announce more details about the Longitude at the National Business Aviation Association Convention next month in Las Vegas.
Walters said the company employs more than 9,000 throughout the state. The majority of those employees are in Wichita, working primarily at plants on the east, west and southeast parts of the city.
The modified agreement stems from a 10-year agreement that the state, under former Gov. Mark Parkinson, city and county made with Hawker Beechcraft in December 2010. The agreement included $40 million from the state and $5 million from the city and county to keep most of Hawker Beechcraft’s operations, including its headquarters, in Wichita. The deal followed reports that the company was considering moving out of Kansas.
As part of the 10-year agreement, state, city and county money was to be used to pay to train Hawker Beechcraft workers, upgrade its products and reconfigure its operations. The state’s contribution came in the form of tax-exempt bonds and was to be paid off by revenue from Hawker Beechcraft workers’ payroll tax withholdings.
In May 2012, Hawker Beechcraft entered Chapter 11 bankruptcy and in February 2013 emerged as Beechcraft Corp. In December 2013, Cessna Aircraft’s parent company, Textron Inc., announced it would acquire Beechcraft Corp.
In March 2014 Textron Inc. completed its acquisition, combining Beechcraft and Cessna under Textron Aviation.
During and after the bankruptcy, and following the acquisition, Beechcraft employment dipped below the minimum 3,600-employee threshold called for in the original agreement with the state. According to an e-mail to The Eagle from the Kansas Department of Commerce on Thursday, Beechcraft employment dropped from 3,372 employees in 2013 to 2,921 in 2015.
The e-mail also said that between 2011 and 2014 Hawker Beechcraft and its successors received about $33.5 million of the $40 million the state was to provide the company, reflecting “pro-rated payments” because of fewer employees.
Commerce spokesman Dan Lara said Thursday that under the original agreement, Textron Aviation would have been subject to “claw backs” in the second five years of the original 10-year agreement with Hawker Beechcraft.
In other words, Textron Aviation would have had to pay back the money the state had earlier provided.
The modified agreement, Lara said, allows Textron Aviation to avoid those claw backs by agreeing to maintain 4,300 jobs specific to the Beechcraft product lines comprising the military T-6 trainer, Bonanza, Baron and King Air, as well as work on the new Citation Longitude and any future turboprop aircraft.
The jobs figure also reflects operations at its aircraft interiors unit, which it acquired in January when it purchased the assets of UTC Aerospace Systems in Wichita. The unit makes interior furnishings for Citation business jets and King Air turboprop airplanes.
Lara said the modification also includes the stipulation that Textron Aviation maintain the Cessna Citation Service Center at Wichita Eisenhower National Airport and its headquarters in Wichita until 2020.
Lara also said there are “no additional incentives tied to this agreement.”
Textron Aviation said in Thursday’s news release that it also is working with the city of Wichita and Sedgwick County to modify the original Hawker Beechcraft agreement. The modified agreement with the county is expected to be addressed at the Nov. 4 commission meeting, according to a statement from commission chairman Richard Ranzau in the release.
Wichita Mayor Jeff Longwell said in the release that he looked forward to “working with the company to develop a similar agreement with the City of Wichita.”
Thursday’s announcement by Textron Aviation was the first time in a while that the company had publicly discussed its Citation Longitude jet.
That super midsize business jet would be the company’s newest Citation jet. It was first announced in 2011 but Textron Aviation has said little about it since that announcement.
The Longitude is expected to have a range of 4,000 nautical miles, a Mach.86 cruising speed and a 45,000-foot maximum cruising altitude. It is also expected to carry a maximum of 12 passengers.
Until Thursday, a Textron Aviation spokeswoman said, the company had not announced where it would build the jet, which would have the longest range of any Citation business jet.