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Airbus announces plans to build jetliner factory in Alabama

The European firm will invest $600 million in the plant in Mobile where the single-aisle A320 will be assembled. The company hopes the move will help it sell more planes to U.S. carriers.

July 03, 2012|By W.J. Hennigan, Los Angeles Times
  • Airbus Chief Executive Fabrice Bregier and Alabama Gov. Robert Bentley shake hands during the announcement of plans for a plane-assembly plant in Mobile, Ala. The plant is expected to create 1,000 jobs.
Airbus Chief Executive Fabrice Bregier and Alabama Gov. Robert Bentley… (Dan Anderson, EPA )

With a blast of red, white and blue confetti, officials from European aircraft maker Airbus announced plans to build a sprawling plane-making facility in Mobile, Ala.

Work on the company's first U.S. manufacturing plant will begin next year at a total cost of $600 million, Airbus said Monday.

Once built, the 53-acre site will house assembly on the company's single-aisle A320 commercial jetliner. Airbus hopes to secure more contracts with U.S. carriers, which constitute the largest market for single-aisle planes in the world.

The A320 is already widely flown by U.S. carriers, including Virgin America, Delta Air Lines and US Airways. But with a stateside facility, Airbus hopes to capture even more customers from archrival Boeing Co. The A320 competes directly with Chicago-based Boeing's 737, the world's most popular commercial jet.

Airbus expects to deliver its first Alabama-made A320 in 2016. The company expects the facility to produce 40 to 50 aircraft a year by 2018.

"Here in Mobile, we have all the ingredients of success," Airbus Chief Executive Fabrice Bregier said at the event. "This will help us get a bigger share of the upcoming market."

For years, the Toulouse, France-based company has touted its increased U.S. spending and expansion of its American supplier base in hopes of securing more business. The company said it spent $12 billion in investments and supplier contract work in the U.S. in 2011, which supported more than 210,000 jobs in more than 40 states.

In California, Airbus said it spent more than $1 billion in 2011.

In Harbor City, for instance, workers for McStarlite Co. pound billboard-size sheets of metal into doughnut-shaped parts called lipskins that cover the edges of Airbus jet engines. Parker Aerospace has employees in Camarillo who churn out hoses and connectors for the planes. Farther south, Parker has about 2,000 workers in Irvine who assemble fuel systems for Airbus aircraft.

"The demand for commercial aircraft is growing worldwide, and major airframers need to expand their manufacturing and assembly capabilities to keep up," said Jeff Rolf, Parker's vice president of commercial programs. "We are delighted that Airbus has decided to locate this new plant here in the U.S."

Currently, Airbus has assembly plants in Toulouse, France; Hamburg, Germany; and Tianjin, China.

Mobile Mayor Samuel L. Jones said he visited some of those facilities in trying to get the company to build in his city.

"A lot of hard work went into this deal," he said. "We've been working with Airbus for more than six years now."

Airbus first indicated that it would build a plant in Alabama if it won an Air Force contest worth $35 billion to build a fleet of 179 aerial refueling tankers. In 2011, the Pentagon decided to award that contract to Boeing, and it appeared that plans for the plant were dead.

"We were disappointed but not discouraged," Jones said. "We kept at it and it paid off."

Airbus said the Alabama facility is expected to create as many as 1,000 jobs. That's significant, considering all of Airbus' U.S. facilities together employ about 1,000 workers.

Alabama is a right-to-work state, where workers cannot be forced to join a union or pay union dues as a condition of employment. As a result, it's considered less union-friendly than other states, and this has been appealing to other international manufacturers.

In recent years, Alabama has become a hub of automobile manufacturing. It is home to three major auto factories: a Mercedes-Benz plant near Tuscaloosa, a Hyundai factory in Montgomery and a Honda facility in Lincoln.

Scott Hamilton, an aviation industry consultant and managing director of Leeham Co. in Issaquah, Wash., said it will take years before Airbus sees results from the new facility. But with this plant, Airbus now has a major opportunity to build and sell the upcoming A320 NEO passenger jet with new fuel-saving engines before Boeing can deliver its upcoming fuel-stingy competitor, the 737 MAX, he said.

"The MAX is set to come two years after the NEO," Hamilton said. "That puts Airbus at a major advantage."

Airbus' announcement is unlikely to change the public impression of the rival companies. Airbus will still be known as a European plane maker, he said, and Boeing, with its more than 170,000 employees across the U.S., will be known as the American plane maker.

"Airlines like having the competition because it drives down prices," Hamilton said. "But I have a hard time imagining that this will change people's perspectives on either company."

william.hennigan@latimes.com

Times staff writer Jerry Hirsch contributed to this report.

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