June 22, 2005


What happens when unfair foreign government subsidies hurt competition by domestic companies, but those same subsidies are used to invest in OTHER domestic ventures? Airbus picks Mobile, Ala., over three other Southern sites


The Associated Press

WASHINGTON (AP) — The parent company of European aircraft maker Airbus, seeking to better compete with Boeing for a lucrative Air Force contract to build military refueling tankers, announced Wednesday it has selected Mobile, Ala., over three other Southern sites for a $600 million factory.

The European Aeronautic Defence and Space Co. selected the Alabama site over three rival bids from Melbourne, Fla.; Kiln, Miss.; and North Charleston, S.C.

Ralph D. Crosby, chairman and CEO of EADS North America, said Mobile was chosen because it is "strategically located" on the Gulf of Mexico, and offers a skilled workforce, airport runways and a deep-water port. Brookley Industrial Complex provides 4.5 million square feet of industrial space, and includes access to the Mobile downtown airport. [...]

The immensely public search gave EADS some much-needed positive spin at a time when the U.S. and the European Union are engaged in a trade battle over the EU's subsidies to Airbus, which the U.S. claims gives it an unfair advantage over its chief rival, Boeing.

EADS hopes to get a substantial portion of an expected $9 billion in new spending for military tanker planes, but congressional leaders are trying to tie the subsidy debate to the contract decision.

"My only guess is the openness is political," said Charles Hill, a professor at the University of Washington School of Business who closely follows the aeronautics industry.

"They are trying to send a message," he said. "Their strategy is to have quite a bit of work done in the United States. It is clear they want to be seen as a global organization, not just a European one."

EADS and subsidiaries already have facilities in Mississippi and Alabama. EADS-owned American Eurocopter LLC opened a helicopter factory in Columbus, Miss., last year, and EADS North America this year invested in a new support center for Coast Guard patrol aircraft in Mobile near the proposed site for the tanker factory. [...]

Well, it's obviously a boon for Mobile, and for Alabama as well, just like the auto manufacturing industry has been.

I suppose on the question of subsidies, it's one of those robbing Peter to pay Paul things, which is just fine as long as you're Paul.

Posted by Terry Oglesby at June 22, 2005 11:59 AM