Gov. Mark Parkinson and legislative leaders have approved $27 million in bonds to help Bombardier Learjet expand production facilities in Wichita.
The State Finance Council, which includes the governor and eight House and Senate leaders, endorsed an incentive package Friday tied to the Learjet 85, The Topeka Capital-Journal reported. The arrangement commits the state to $27 million in bond financing, which would be repaid over seven years.
The company agreed to keep existing production operations, saving about 300 jobs, and to expand employment by 300 positions. That would mean a 2,000-member work force at the plant.
Bombardier is expected to invest $600 million in the Learjet 85 program in Wichita. The new business jet is expected to enter service in 2013.
Parkinson said too many other states are willing to offer incentives to draw Wichita jobs away from Kansas. He said Bombardier could have received more money from other states had the company agreed to move the Learjet 85 project.
"This is a very important industry in Kansas," Parkinson said. "We've got to do everything we can to keep these companies."
Bill Thornton, secretary of the Kansas Department of Commerce, said a significant element of the agreement obligates the company to keep existing operations in Wichita throughout the life of the bond deal.
The Learjet 85 is an important piece of the company's production portfolio as the industry works to shake off lackluster sales from the recession, he said.
Bombardier is expected to make use of the state support to build a paint facility, customer delivery center and production flight test complex. Production hangars will be enlarged to accommodate final assembly of the mid-size Learjet.
The plane's composite fuselage will be manufactured at Bombardier's facility in Mexico. Each subassembly would be transported to Wichita for fitting, testing and painting.
The state bonds are to be repaid by withholding taxes from workers' paychecks that would have otherwise gone to the state's general fund.
The U.S. Bureau of Labor Statistics indicates aircraft workers in Wichita lost 11,700 jobs between October 2008 and April. Thornton said the company approached the state in 2008 about working on an incentive package, but the tailspin pushed discussions into 2010.
Information from: The Topeka Capital-Journal, http://www.cjonline.com