Airbus to open factory on rival Boeing's U.S. turf

Tue Jul 3, 2012 12:12am EDT
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By Karen Jacobs and Kelli Dugan

MOBILE, Alabama (Reuters) - Flanked by U.S. Gulf Coast politicians, top executives from Airbus unveiled plans to build their first U.S. factory and said it will help the European planemaker win market share from Boeing Co (BA.N: Quote) in the world's busiest aviation market.

The plant in Mobile, Alabama, is due to open in 2016 and will assemble narrow-body A320 aircraft, said Airbus, a unit of EADS EAD.PA. The facility is expected to create some 1,000 jobs and help the company take "more than a few percentage points" of market share from its prime rival, Airbus sales chief John Leahy said.

Airbus holds 20 percent of the market for narrow-body jets in the United States, compared with 53 percent of the market worldwide.

Even though assembly is a relatively small part of the work of building an aircraft, Airbus is betting that having a U.S. facility will boost its credentials and help it win deals. The Mobile plant will be only the second Airbus has outside Europe that builds its top-selling workhorse jet; the other is in China.

"I think we became American with this," New York-born Leahy said. "Even if we have been spending $12 billion a year in the U.S. and have 40 percent of our procurement in the U.S., that doesn't quite make you American in the way an assembly line does."

Airbus said the new plant had the potential to create 5,000 jobs for Mobile and surrounding areas, as big manufacturing operations tend to lure suppliers and additional jobs.

The Mobile event drew heavy-hitters from U.S. airlines and suppliers, including American Airlines AAMRQ.PK CEO Tom Horton, JetBlue Airways Corp (JBLU.O: Quote) CEO Dave Barger and Goodrich Corp GR.N CEO Marshall Larsen.

They arrived to the strains of the rock group Steve Miller Band's 1977 hit "Jet Airliner" -- that homage to Boeing's 707 is something of an anthem for the aviation industry, and Boeing last year hired Miller himself to perform it for workers at its Everett, Washington factory.   Continued...

Airbus CEO Fabrice Bregier (L) shakes hands with Alabama Governor Robert Bentley during a news conference in Mobile, Alabama July 2, 2012. European planemaker Airbus held a news conference to announce that they will construct an assembly plant for their A320 in Mobile. The plant will give Airbus its first assembly site in the United States. REUTERS/Jonathan Bachman