Senior Reporter
Airbus’s new factory in Mobile, Alabama, is a statement of intent on the company’s plans for North America.
It’s no secret that there is no love lost between Boeing and Airbus. When you’re part of a duopoly in one of the world’s most lucrative and high profile industries, a win for the opposition means a loss on your scorecard. Any order placed with your competitor is literally taking food from your mouth (albeit perhaps USDA prime rib or foie gras, depending on whether you’re in Seattle or Toulouse). Such circumstances tend to breed contempt, possibly sometimes married with a begrudging respect.
This week, the stakes got raised a little higher in this particular game of heads-up poker. On Monday, Airbus held the inauguration ceremony for its brand new final assembly line (FAL) factory in Mobile, Alabama. The plant will receive pre-fabricated sections of planes from Airbus’s European manufacturing centres, shipped across the Atlantic to be put together in the US. When fully up to speed in about 18 months, four new aircraft from the A320 family will roll off the line each month.
As the factory will act only as an assembly plant, the increase to overall production capacity will be negligible. On top of this, any savings on labour costs that Airbus will make in Alabama are likely to be outweighed by the cost of shipping the parts from Europe to Mobile. Why then, I hear you ask, has Airbus just spent $600m on the facility? The answer can be found among the many stars and stripes that adorned the FAL for the inauguration ceremony, and the facts and figures delivered by senior Airbus executives at a press conference the evening before.
The A320 is the world’s most popular single-aisle aircraft. In order to try and satisfy global demand, and strengthen links in the region, Airbus set up its first ever assembly line outside Europe when it opened an FAL in Tianjin, China, in 2008. Although China’s economy is a beast, the US is still the alpha dog, and it remains the world’s biggest market for single-aisle aircraft. Over the next 20 years, Airbus expects the North American market to grow by 40 per cent, with over 4,700 new single-aisle planes needed to meet demand.
With figures like that, perhaps the only surprise is that Airbus hasn’t dived in headfirst and set up a full manufacturing operation in the US. It has had a presence in Mobile since 2007 via its engineering centre, and has an adjoining 116 acre site to the one it has just developed if it decides to expand. But the city has also been at the centre of one of the darker chapters in the history of Airbus and Boeing, and the relative caution of the FAL may be well advised for now.
Mobile was due to be the manufacturing centre for a joint EADS (Now Airbus Group)/Northrop Grumman programme to manufacture the KC-X – the replacement for the US Air Force’s tanker aircraft for mid-air refuelling. In a major shock, Boeing lost out on the bid in 2008, and the contract was awarded to EADS/Northrop Grumman. Boeing took its protest to the Government Accountability Office, eventually succeeding in having the bidding overturned
Understandably, Airbus and the people of Mobile don’t remember the ordeal particularly fondly. It came at a time when the US car industry was in the gutter, and manufacturing jobs were being shed wholesale. The contract offered hope to many who were looking to transfer their automotive skills to the city’s burgeoning aviation industry.
Though reluctant to dwell on the tanker controversy during the inauguration, executives and a host of Alabama politicians made multiple references to the trust that had developed between the people of Mobile and Airbus. The saccharine sweetness could at times have done with a pinch of salt, but there did appear to be a genuine mutual respect, forged in the heat of battle with Boeing. Now that Airbus is a bona fide US manufacturer, the Seattle giant will no doubt once again be paying close attention to what’s happening in Mobile.
As the UK is the world’s second largest aerospace components exporter and the UK content of most Airbus aircraft is up to 33% (probably more than any other country) it would have made much more sense to base a new assembly line in the UK.
Apropos the EADS/Boeing fiasco: Perhaps one day, quite soon, those at the summit of European companies and societies might finally realise that the purpose of their equivalents based in the USA is simple.
To ensure that ‘they’ -Uncle Sam- wins every time. If altering the rules is the route to doing so, that too! If stealing the technology and skills of European firms and Engineers (sometimes by taking them on as staff: staff who in the past were neglected or mis-used by their own European management…that as well) and all the time dangling the carrot of “we are in the ultimate your defenders and protectors against that beast, Putin and his predecessors, and by God, you are going to pay for that!” It is amazing to me that even after the succession of occasions when the above scenario has been played-out (from failure to share ‘atomic secrets’ after WWII up to the Lockeed Tristar/Rolls Royce fiasco) our ‘leaders’ are still conned every time! A society can be measured by the games it plays (well can’t it!) Most of ‘their’ games…involve brute force and ignorance: and most are played by them alone. I still recall a senior executive of a major media chain in 1970 describing ‘foreign news’ in a major Philadelphia newspaper…as what happens in Pittsburg: no wonder US policies to deal with ‘overseas’ threats are so poor: as they and their politicians, civil servants and diplomats have little or no idea what happens elsewhere. Presumably that is why they get it so wrong so often. (from Viet-Nam to Granada, via Iraq, Afganistan and just about everything and everywhere else they have ‘touched’ and distressed.
Sorry to rant-on: and just in case Grumpy and Average again repeat that I am a left-ist pinko…. but having seen the results…I simply ask when will it end: and someone of authority realise what has been happening.
Mike B
On a similar theme: is it seriously suggested that assembling precision parts shipped (or planed!) in from elsewhere is “a bona-fide” manufacturer. I know of another major European firm (this time a car manufacturer) which was persuaded to set-up an assembly plant (based not a million miles from Mobile) which does exactly the same: imports all the really important elements (engine, gear-train, transmissions) from Europe because “those hilli-billies would not know what a tolerance less than about a quarter of an inch (and there is another clue -they are still using Imperial standards!) was, let alone be able to work to it!”
Mike B
Mike,
Nobody makes complete aircraft anymore because you can’t scale your operation up.
Aircraft are fabulously complicated beasts, and the amount of engineering that goes in to something like landing gear doors always astounds me. And they are pretty simple in respect to other parts.
In some ways, integration is the most daunting task. So they are not really “hilli-billies” unless they are just being asked to do the upholstery.
@ Tim,
It might make more sense to base an assembly plant in the UK but this isn’t about sense. Its about marketing, sales and politics.
Mike Blamey,
I am fairly certain I have never cast any aspersion or indeed complemented on your political leanings. Those are only and entirely your own. I just find some of the statements you make sweeping and erroneous. you can be cerise with sky blue stripes for all I care politically and your opinion would be just as valuable an anyone else’s who comments here. When I do disagree with you it is over the accuracy of specific statements. And I apologize if I have caused you to feel differently.
Dear Anon:
My sole link to landing gears (never mind the doors!) was assisting in the design, modification of a vast braiding machine (think Maypoles as on village greens and fetes!) to create torsionally(is there such a word) advanced ‘struts’ for the legs of such. I do believe it was landing-gear doors that were the subject of communication many years ago between myself (a textile and carbon-fibre expert) and staff at a major aerospace manufacturer who wondered if there was a beter way (than drilling holes in the pre-pregged panels!) to ‘fix’ the hinges, etc. there was!
The hilli-billy remark is not mine: but one from a VERY senior executive of an European car manufacturer (with HQ not a million miles from Bavaria) describing the overall standard of assembly and machining operative first offered to their US based operation. After they had been properly ‘trained’ [should that be planed?] they were much better. And don’t be rude about car upholstery (a joke!) amazingly I gather that all manufacturers spend a great deal of time ensuring that such is optimized. Its the classical ‘functional’ textile. Has to look great-ie have excellent paterns, colours but also be hard-wearing and long lasting: in what is a very hostile environment. (strong sunlight, high temperatures, likelihood of abrasion, stains, etc. I did have a student at Coventry (a young lady) who had previously been told by her school careers staff that she might consider a career buying/selling underwear in a well known high-street retailer, who graduated with an excellent Degree (European Business and Technology) and who designs ‘car-cabin-interiors!’