UPDATE 1-Bombardier suspends new Learjet, cuts jobs and forecasts
(Adds forecasts, background on Learjet)
TORONTO Jan 15 (Reuters) - Bombardier Inc on Thursday cut its forecasts for 2014 and said it would slash 1,000 jobs in Mexico and the United States and suspend the development of its Learjet 85 business aircraft because of weak demand.
The Canadian plane and train maker said cash flow from its aerospace operations would be about $800 million for 2014, below its previous forecast of between $1.2 billion and $1.6 billion, even though plane deliveries were slightly higher than expected.
Suspension of the program to develop the new Learjet reflected continued weakness in the light aircraft category since the economic downturn, the company said.
The news comes as Bombardier pushes to bring its high-stakes CSeries jet into service. The new commercial jet is scheduled to go into service in the second half of this year, and Bombardier is racing to complete flight tests, which had to be halted for several months last year because of a mechanical glitch.
The new Learjet had also been in the midst of flight testing. With another new business jet, the Global 7000 and 8000, nearing first flight, Bombardier had been facing the prospect of three simultaneous flight-test programs.
Bombardier Chief Executive Pierre Beaudoin had said in October the Cseries and the Global 7000 and 8000 were higher priorities than the Learjet 85. Even so, asked whether Bombardier might abandon the program, Beaudoin said it was moving ahead, and that it would be a success story.
Bombardier said the $1.4 billion charge was mainly related to impairment of the Learjet 85 development costs. The company said the 1,000 job cuts would be at its sites in Querétaro, Mexico, and Wichita, Kansas.
(Reporting by Euan Rocha; Editing by Bernadette Baum)
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