Airbus heads south in battle with Boeing

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.

Airbus FAL

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.

Airbus FAL

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. 

Airbus FAL

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.

Airbus FAL

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.