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Thursday, June 28, 2012 - Page updated at 09:30 p.m.

Airbus reportedly to announce plans for Alabama plant

By NICOLA CLARK
The New York Times

PARIS — Airbus, the European plane maker, plans to build its first assembly line in the United States in Mobile, Ala., in an aggressive foray into the world's largest market for single-aisle airplanes, people familiar with the plan said Wednesday.

The plan involves an investment of several hundred million dollars in a plant on Boeing's home turf that could eventually assemble dozens of Airbus' popular 150-seat A320 jets each year. Details were expected to be announced as early as Monday, said the people, who spoke on condition of anonymity because the plan was still confidential.

In taking the plunge into the United States, Airbus is making a bet that U.S. airlines, many of which are saddled with large fleets of aging jets, will be enticed to consider an A320 that was "made in America" over Boeing's competing 737. By doing the final assembly of the planes with nonunion U.S. workers, and in dollars, Airbus also stands to shave off significant production costs.

Globally, Airbus and Boeing split the market for single-aisle planes fairly evenly. But in the United States, Airbus holds just a 20 percent share.

North America is the biggest market for the single-aisle category of planes. Airbus has forecast that nearly 70 percent of new jet sales worldwide over the next 20 years — 19,200 aircraft worth $1.4 trillion by 2030 — will be of this type. Forty percent of those planes are expected to be used to replace aging, less fuel-efficient aircraft.

Stefan Schaffrath, a spokesman for Airbus in Toulouse, France, said Wednesday that the company had "nothing to announce at this point."

But Fabrice Bregier, the new Airbus chief executive, confirmed in a Spanish newspaper interview published Wednesday that a U.S. assembly line was "part of a stream of ideas in our international development."

"We are studying what we have to do to be close to our customers," Bregier told the newspaper El Economista. "The U.S. is a major market and we are studying what options would increase our market share there."

No timetable

It was not immediately clear when Airbus expected the plant to open or how many planes it would initially produce. Its plant in Tianjin, China, now assembles three planes a month, around 8 percent of Airbus' global output of single-aisle planes.

An agreement to build an assembly line in Mobile would be the culmination of seven-year on-again, off-again courtship between Alabama officials and European Aeronautic Defense & Space, Airbus' parent company, over locating a major industrial facility in the state.

As long ago as 2005, EADS, which already has an engineering site in Mobile, had proposed building a $600 million assembly line for its larger A330 aircraft as part of a bid for a $35 billion U.S. Air Force contract for aerial fueling tankers that was ultimately awarded to Boeing last year.

Significant payoffs

An earlier move into the United States yielded significant payoffs for the company. EADS' helicopter division, Eurocopter, saw its U.S. market share double to around 50 percent after opening an assembly line in 2004 in Columbus, Miss., for its UH-72 Lakota and A-Star choppers, whose customers include the U.S. military, Coast Guard, local police, hospitals and tour operators.

European governments, particularly in Germany and France, are likely to be wary of such a move by a company considered one of Europe's industrial jewels. But according to one person familiar with the plan, the governments are likely to be persuaded of the business case that it could eventually create as many as 10 new jobs in Europe — not only at Airbus, but also for its vast supplier network — for every one job created in Alabama.

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