Courtesy of Mish.
Airbus is hoping to take US market share from rival Boeing by assembling jets in Mobile, Alabama. Airbus is a French-based company, jointly run by French and German management.
Senator Rick Shelby (Alabama) is supportive of the move. Boeing, as one might have expected, issued complaints of European subsidies, as if US defense contracts don’t in essence amount to the same thing. Both sides have complained to the WTO.
Here are a few articles to consider.
Airbus Fires Shot in Labor War
The Wall Street Journal reports Airbus Fires Shot in Labor War
Airbus announced plans to start assembling passenger jets in the U.S. starting in 2015, a move likely to affect labor and trade relations on both sides of the Atlantic.
Airbus outlined the plan Monday at an event in Mobile attended by U.S. suppliers, airlines and politicians, carefully stage-managed amid potential negative reaction on both sides of the Atlantic. EADS shares rose 2% Monday in Paris.
The company said it would create 1,000 jobs at its Brookley Aeroplex in Mobile, doubling the company’s U.S. workforce. One assembly-plant job typically supports up to four at suppliers, Airbus said. Parts for the aircraft will be shipped to Mobile from Hamburg, the site of an existing single-aisle Airbus assembly plant.
“We go where the talent is,” Airbus Chief Executive Fabrice Bregier said in Mobile ahead of a parade of local politicians welcoming the $600 million investment. He didn’t respond directly when asked whether the move would shift employment to the U.S. from Europe. The company’s European unions have voiced concern about production moving overseas, according to French media reports.
He said labor flexibility afforded by a union-free facility in right-to-work Alabama helped drive the plan. So, too, did the opportunity to change the balance of dollar-generated revenue with costs that are generated mainly in euros.
About 40% of the average cost of producing Airbus planes is with U.S. suppliers. A senior executive said labor accounts for only 5% of an aircraft’s costs.
“We’re going to do everything [we can] to create the environment,” Sen. Richard Shelby (R., Ala.) said at the Monday event.
Battle for Market Share
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