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Bombardier has taken a $1.4 billion impairment charge after deciding to "pause" its Learjet 85 programme due to continued weak demand in the light jet sector.
The write-off will be recorded as a pre-tax special charge in fourth-quarter results scheduled for release by the Canadian airframer on 12 February.
Bombardier also will further reduce its workforce by 1,000 employees, with the job cuts focused on Learjet 85 manufacturing sites in Queretaro, Mexico, and Wichita, Kansas.
The all-composite Learjet 85 was launched in 2008 with plans for service entry by the end of 2013. Bombardier blamed schedule delays initially on problems with certificating the design and manufacturing of the business jet's all-composite structure.
The company said it needs to focus on development of its all-new C Series jet in the 100- to 150-seat category, a huge gamble that involves going directly up against giants Boeing Co. and Airbus SAS; it is also continuing with some business-jet platform revamps.
A visit earlier this year to Bombardier's Mexican rolling stock manufacturing facilities left the analyst believing the company was well positioned to win the majority of nearly US$8 billion of contracts in the country.
About 70 per cent of Mexico's trains have been supplied by Bombardier and it is the only major manufacturer in the region with regional design, manufacturing and service operations, Spracklin said.