Airbus a game changer?
Published 12:05 am Wednesday, July 4, 2012
Monday’s formal announcement that Airbus will build its A320 passenger planes in Mobile, Ala., is good news for all of the Gulf Coast, and a “game-changer” for Alabama.
Seth Hammett, who worked was part of Alabama’s courtship of Airbus first as Speaker of the Alabama House of Represe-ntatives and later as acting director the Alabama Develo-pment Office, said Tuesday there is “no question” it will help Alabama’s economy, and in turn, local economics.
Airbus, a division of EADS, already builds planes in Toulouse, France, Hamburg, Germany, and Tianjin, China.
“There are four places in the world where this is going to occur,” Hammett said. “To have one in our state is outstanding.”
Alabama first began courting EADS in 2004, after the U.S. Air Force announced it was seeking RFPs for replacement of its KC135 tanker aircraft. The newest ones in the fleet are more than 50 years old.
In January of 2005, EADS had a list of 70 places this project could be done in the United States. That list was narrowed to four, and in June of 2005, EADS chose the Brookley Aeroplex facility in Mobile over sites in Florida, Mississippi and South Carolina.
The Air Force’s bidding process occurred in 2006, and in 2007, the Department of Defense notified EADS that it had been awarded the tanker contract.
EADS’ competitor, Boeing, challenged that contract. The Department of Defense threw out the bids and started over. The second bidding process lasted through 2010.
In February of 2011, EADS awarded the contract to Boeing. It was Hammett’s grim duty as then-acting director of ADO to make the announcement in Alabama.
Hammett called Monday’s announcement, leaked last week by the New York Times, “the worst-kept secret in history.” But it was still great news in Alabama.
“It is better news for us than if the tanker contract had been awarded to EADS,” Hammett said. “No. 1, there will be more aircraft assembled there. By 2015 or 2016, they will be assembling four aircraft per month.”
The A320 is at present the “most popular airplane in the world” for commercial airlines.
“EADS had not able to assemble enough of these aircraft in France and China, and there was a need for another location. Clearly, they wanted the flag planted here in the U.S.,” Hammett said.
If EADS had gotten the tanker contract, assembly would have been at the mercy of the Congress, he said.
Given the pressure to rein in deficit spending, there is no way to know if replacing the tanker will continue to be a national priority.
“The government how spends $1.42 for every $1 it brings in in taxes,” Hammett said. “We are at 100 percent of gross domestic product in terms of debt, which is $15 trillion and working toward $16 trillion.
“That’s the GDP for the entire year,” he said. “When it gets to the range of 120 percent, we are in real trouble.”
Government curtailments to spending are unavoidable.
“With a commercial venture in Alabama by Airbus now, we’ll be building for airlines around the world and an airplane many airlines are choosing to buy.”
Airbus will make a $600 million capital investment in its Alabama facility.
“That is just the beginning,” Hammett said. “We know that suppliers locate around the mothership. We are still getting first, second and third-tier suppliers because of Hyundai and KIA, which is just across the line in Georgia.”
Monday’s announcement will be followed by many announcements from Airbus suppliers, Hammett predicted.
“This just gets us started in the aviation business,” he said. “This will do in aviation what Mercedes did for us in the automobile sector.”
With the emphasis in Covington County in recent years on aerospace industries, it is not unrealistic to think a component manufacture could locate here, Hammett said.
“There is no question it will help the economy,” he said. “Certainly, people living in our area will have opportunities for these jobs. I think for the whole Gulf Coast, this is really good news.”