Airbus European plane maker plans to build its first assembly line in the US in Mobile, Alabama, in an aggressive foray into the world’s largest market for single-aisle airplanes, people familiar with the plan said on 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 next week, said the people, who spoke on condition of anonymity because the plan was still confidential.
In taking the plunge into the US, Airbus is making a bet that US airlines, many of which are saddled with large fleets of ageing 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 non-union US workers, and in US dollars, Airbus also stands to shave off significant production costs.
Globally, Airbus and Boeing split the market for single-aisle planes fairly evenly. However, in the US, 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 US$1.4 trillion by 2030 — will be of this type. Forty percent of those planes are expected to be used to replace ageing, less fuel-efficient aircraft.
However, the move to open a US factory, which follows the opening of Airbus’ first non-European assembly line in China four years ago, could raise eyebrows in European capitals and among labor unions — particularly in France, where the new Socialist government of French President Francois Hollande has said it would seek to punish companies that move jobs overseas with tax penalties and the withdrawal of certain state subsidies.
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. However, 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.
Stefan Schaffrath, a spokesman for Airbus in Toulouse, France, said on Wednesday that the company had “nothing to announce at this point.”
However, new Airbus chief executive Fabrice Bregier confirmed in a Spanish newspaper interview published on Wednesday that a US 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 US is a major market and we are studying what options would increase our market share there.”