Aerospace giant Airbus to build 1st US assembly plant in Alabama

MOBILE, Ala. (AP) — In the battle to dominate the global aviation industry, European aerospace giant Airbus announced its first assembly plant in the United States on Monday, a symbolic and significant step in the competition with archrival Boeing.

The French-based company said the Alabama plant is expected to cost $600 million to build and will employ 1,000 people when it reaches full production, likely to be four planes a month by 2017.

“We are going to create great jobs and generate growth right here,” Airbus CEO Fabrice Bregier said at the convention center in Mobile, where many of the 2,000 people in attendance waved American flags as music played in the background.

Boeing already has a big presence in Alabama, employing 2,700 people in defense and rocket operations.

Airbus planned to build refueling tankers for the U.S. Air Force in Alabama, but its parent company, the European Aeronautic Defense and Space Co., lost the contract to Boeing in 2011.

While Airbus had parts plants in the U.S. before, a full-fledged plane-making factory is a more significant presence and could help it boost its share of U.S. commercial and defense contracts.

The Airbus plant advances the company’s strategy of expanding production outside its home base. The company, jointly run by French and German management and with plants in several European countries, wants to expand in China and India as well as the United States.

The Alabama is also a way for Airbus to save face after losing the Pentagon tanker contract.

The companies have had a long-running international trade dispute. Each also has been critical of subsidies received by the other.

EADS shares have being climbing on European markets since news of the Alabama deal surfaced last week.

Airbus plans to manufacture the A320, a widely used plane flown by Delta Air Lines, US Airways and others. The 150-seat plane is generally used on short- and medium-haul flights, and Airbus makes more of them than any of its other planes. They retail for $88 million, although discounts are common for big customers.

The Mobile operation will join Airbus assembly plants in in Toulouse, France; Hamburg, Germany; and Tianjin, China.

The southern region of the United States is traditionally unfriendly to unions, which will likely mean lower labor costs compared with the company’s other factories in France and Germany.

Airbus unions have expressed concern about European jobs lost to the U.S., a particularly thorny issue in France as new President Francois Hollande tries to re-invigorate manufacturing at home.

Other big manufacturers have found homes in the South. Boeing has a plant in North Charleston, S.C., and Alabama is home to plants owned by Mercedes-Benz, Honda, Hyundai and Toyota.

“It is truly a great day in the history of Alabama,” Gov. Robert Bently said. “It is the result of a lot of hard work and cooperation. This day will shape the future of the region for years to come.”

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