As ceremonies go, despite being led by a man with a very French name and accent, Airbus president and CEO Fabrice Brégier’s July 2 announcement that his company will build a final assembly factory in Alabama could not have been more American.
The red, white and blue was everywhere; balloons and confetti rained down reminiscent of a US political rally, and even the company name was given the Stars and Stripes treatment, to emphasize the “US” in Airbus.
The $600 million, 116-acre A320 family assembly and delivery center will be built on a former US Air Force base site known as Brookley Aerospace in Mobile and follows the establishment of a similar center in Tianjin, China.
The manufacturer expects to begin assembling aircraft in the US from 2012 and to start deliveries from 2016. Airbus said it anticipates the facility will produce between 40 and 50 A319s, A320s and A321s per year by 2018, creating 1,000 jobs.
Make no mistake, this was a very bold and determined campaign to give a European company a highly American profile.
Whether it pays off has yet to be seen, but the manufacturer has three major advantages. First, this plays to the jobs card. There is huge concern in the US about job losses in general and aerospace and defense jobs in particular, with fears that 1 million of these could fall victim to proposed huge Defense Department budget cuts
The 1,000 jobs promised at the Alabama factory may be a relatively small reprieve, but it’s still a significant number of real, hands-on, high-skilled aerospace jobs. And as Brégier said, it’s the type of work that tends to spawn other related jobs: his estimate was that ultimately some 5,000 jobs could be directly and indirectly created. Add to that employment for up to 3,000 construction workers to build the facility, and the “buy Airbus, buy American” message is a strong one to take to Congress.
Second, the company clearly has a powerful friend in the State of Alabama. State and local incentives have totaled “well in excess of $100 million” so far, Airbus executives acknowledged, and there was a huge outpouring of gratitude and warmth from all manner of lawmakers at the ceremony. As Brégier said, “We feel at home here. We feel supported.”
It was far from inevitable, however. Alabama believed it had secured a major military aircraft assembly factory in Mobile when Airbus owner EADS initially won the contract to supply the US Air Force with its new tanker. When that decision was overturned, and the contract awarded instead to Boeing, there was no reason at all for the state to believe it would get another chance, let alone from the same company that was dealt such a bruising experience from US politics.
Yet, it turns out that even as the tanker deal died, the Toulouse-Alabama relationship grew. As Congressman Jo Bonner put it, EADS and Airbus proved to be “a keeper” and have placed a flag deep in American soil.
And third, it’s hard to see how Boeing can outplay this move.
Brégier and his boss, EADS CEO Tom Enders, have played a strategic and canny game.