Former Textron Unit to Settle Fraud Case

Textron Aerostructures, formerly a unit of Textron Inc., agreed to pay $9.8 million to settle allegations that it defrauded the Pentagon by inflating labor costs, the Justice Department said. A lawsuit filed in U.S. District Court in Nashville alleged that Textron Aerostructures inflated costs in contract proposals for work on the wings of the Air Force’s B-1B bomber, the government said. The company, now part of Aerostructures Corp., allegedly withheld information negotiators sought regarding significant cuts in projected labor costs during wing production. “We believe Aerostructures complied with all the legal requirements and we felt it would have prevailed if [the case] had gone to trial,” said Steve Capoccia, a spokesman for Providence, R.I.-based Textron. “The settlement does not constitute an admission of wrongdoing by either company,” Capoccia said. Textron Aerostructures was a unit of Textron Inc. while it was working on the B-1B during the 1980s. Aerostructures Corp. acquired the firm from Textron Inc. in 1996. Nashville-based Aerostructures didn’t comment on the settlement. Textron shares rose 25 cents to close at $78.56 on the NYSE.