Photo | Lagniappe
Airbus’ partnership with Mobile has come a long way since 2008, when the company lost a U.S. Air Force contract for a refueling tanker to archrival Boeing and the city was the butt of national jokes.
It’s a fact that wasn’t lost on Airbus outgoing CEO Tom Enders during groundbreaking events on a new final assembly line facility at the Mobile Aeroplex at Brookley Jan. 16. On several occasions, Enders mentioned the back-and-forth nature of the 2011 decision that ultimately awarded the contract to Boeing.
“We won it and then we lost it,” Enders said of the contract. “I don’t understand why the most powerful Air Force in the world wouldn’t want to use the best tanker on the market. We want to bring the best-performing tanker aircraft to the largest Air Force in the world. It makes sense, doesn’t it?”
It appears Airbus may be making another run at a military tanker contract, as the company joined Lockheed Martin in recently announcing a joint venture to build a tanker to “meet any identified capacity shortfall.”
“Reliable and modernized aerial refueling is an essential capability for our customers to maintain their global reach and strategic advantage,” Lockheed Martin Chairman, President and CEO Marillyn Hewson said in a statement. “By combining the innovation and expertise of Airbus and Lockheed Martin, we will be well positioned to provide the United States Air Force and allies around the world with the advanced refueling solutions needed to meet 21st century security challenges.”
Despite the original loss, Enders and Airbus were determined to partner with the city of Mobile and the state on another project and the A320 final assembly line was born, he said.
Establishing a manufacturing presence in the U.S. has helped Airbus secure a larger percentage of market share. While Enders wouldn’t reveal details, he used the opportunity to take another shot at the company’s main rival.
“The real number is classified because it could embarrass our great competitor,” he said.
Following an announcement punctuated by fireworks, Mayor Sandy Stimpson called the announcement a “game changer” and compared it to when Mercedes-Benz built its manufacturing facility near Tuscaloosa.
“Just as Mercedes was a game changer in the automotive business, what Airbus is doing here is changing the perception of Mobile,” he said.
Stimpson added the success of the partnership between Airbus and Mobile is answering a lot of questions from global manufacturing leaders.
“People around the world in aviation already know about Mobile but when they see Airbus continue to invest in Mobile, that sends another message … ,” he said. “Whether it’s the people they like, or support of the government they like, the workforce they’ve been able to garner — all that will be questions in others’ minds who are thinking of coming to Mobile.”
Gov. Kay Ivey told the group the new assembly line solidifies Alabama as “the place for manufacturing.”
“I’m thrilled Airbus is expanding its operation and adding 400-some jobs,” she said. “Every job created is supported by five additional jobs in the community.”
The A220 facility will give Airbus even more leverage in a U.S. market hungry for the smaller aircraft. The new plane is not really new and was created from a partnership between Airbus and Bombardier that allowed the Canadian aircraft maker better access to the U.S. market for its CSeries aircraft.
Airbus executives, including Enders, admits the partnership and American presence makes it easier to produce for U.S. customers, given the “protectionist and nationalist” political climate.
Boeing argued that Bombardier was using subsidies from Canada to illegally dump CSeries aircraft into the market. The U.S. International Trade Commission ruled in favor of Bombardier and prevented the U.S. Commerce Department from slapping punitive tariffs on the aircraft. Boeing announced last year it would not appeal the ruling.
Although it had been common knowledge the new final assembly line would be located in Mobile, the city and state put icing on the cake with a number of incentives for the European company and its promise of hundreds of more jobs.
The city and county each approved $4 million in cash incentives to the company. Additionally, the city is making a small investment in FlightWorks Alabama, a program touted as a way to create a pipeline from local schools to the aircraft manufacturing trade.
Before approving the incentives, councilors asked Airbus officials if they would be willing to assure that Mobile County residents got first preference to jobs at the new facility.
The state meanwhile chipped in $17 million of incentives, including an $8 million reimbursement on capital costs and as much as $9.8 million in jobs credits for new employees for 10 years, Alabama Secretary of Commerce Greg Canfield said. The job credit, created in 2015, allows Airbus to receive 3 percent per year of the payroll taxes paid to the state from new employees, he said. Canfield argued the facility could have been located in Canada, but added the incentives were less about drawing Airbus to Mobile again and more of an investment in the community.
Regardless of what the incentives are used for, they could put the city in a precarious position if another large industry expresses similar interest.
City spokesman George Talbot said there is enough money set aside for economic development now to cover what’s currently in the pipeline, which includes some additional aerospace-related announcements — but after that, money is tight.
Stimpson agreed, urging Airbus suppliers and others to make their decisions about relocating quickly.
“Those companies that come sooner rather than later, they will have a better shot because there will come a point in time where the pump has been primed, the water is flowing free and you know we’re always going to want a company to come here, but we may not be able to prime their pump with cash or incentives,” he said. “We possibly could, but my advice is to come in the queue earlier rather than later.”
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