News Column

Airbus Launches Boeing Challenge with Factory Start

April 7, 2013

Daniel Schnettler, dpa

Airbus Factory, Boeing

Mobile, Alabama (dpa) - European-based Airbus is to launch its invasion into Boeing territory on Monday with the groundbreaking for construction of its first US plant in Alabama.

The move to grab a larger share of the huge US commercial airline market from Boeing comes as the US behemoth struggles with its Dreamliner, grounded due to battery problems.

"We have to be visible in the United States," Airbus chief Fabrice Bregier declared last summer when the factory plans were announced in Mobile.

The 600-million-dollar factory will begin producing Airbus's successful A320 commercial planes by 2015, and plans to produce 40 to 50 of the middle-distance aircraft a year and employ 1,000 people when fully operational.

"We are convinced that we can take over the US market," Bregier predicted.

Boeing by far dominates the most important aircraft market in the world, where people board planes for domestic travel the way Europeans board trains. Many airlines use only Boeing aircraft, such as the huge domestic airline Southwest, which has nearly 700 Boeing jets.

In comparison, only 1,100 Airbus jets are in use across the whole country, Airbus has said.

Airbus wants a larger piece of the market, and anticipates that in the next 20 years, US airlines will need to buy 5,300 new planes. Boeing anticipates an even greater demand.

The most popular planes in US passenger transport are those with 100 to 200 seats - such as the Airbus A320 or Boeing's 737.

Airbus hopes that producing planes in the US will break Boeing's hold on the market. The heads of several US airlines have expressed positive anticipation over the new plant. In addition, by building in the US, Airbus will avoid the risk of fluctuating currency conversions.

Airbus has apparently studied carefully the success of other foreign firms in the US that have built factories here. The best example is the success of Japanese and German car makers, which have robbed Detroit's Big Three of market share. Or Siemens, which has been praised twice by President Barack Obama in speeches.

In Mobile, Airbus is building the plant facilities and a runway. The 1,000 employees will join another 1,000 already working as trainers, maintenance and other roles supporting the current Airbus aircraft in the US.

The production in Alabama could also open the door to another important client: the US military.

Seven years ago, Airbus agreed it would build a factory in Mobile if it was awarded the 35-billion-dollar contract to build refueling planes for Air Force tankers. That contract went instead to Boeing, after years of arguments and challenges that Boeing was being given an unfair advantage.

The contract decision added tension to decade-long trade disputes between the US and Europe over subsidies and other unfair advantages for Boeing and Airbus. The World Trade Organization ruled that both Boeing and Airbus received improper subsidies from their governments.

Airbus built an engineering facility in Mobile after losing the contract, but did not move forward with plans for a commercial airline factory until July 2012.

Boeing's lithium-ion battery problems involve overheating and short-circuiting problems used in part to boost the Dreamliner's fuel efficiency. The grounding of its 49 passenger jets in use around the world was ordered in January after a battery caught fire and another melted on the planes.

Alabama is a right-to-work state, meaning labor unions cannot force workers to join or pay union dues.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters