Airbus to start manufacturing in the US

Airbus has unveiled plans for its first US factory to make passenger aircraft, in a fresh sign of US manufacturing’s improving competitiveness. The European aircraft maker is investing $600 million in a factory manufacturing narrow-body aircraft in Mobile, Alabama, in a move that will increase its competition with Boeing. The latter has a commanding sales lead in the USA, but Airbus is hoping that a factory employing 1,000 people will help it to win more orders there. The USA is forecast to be the second-most valuable market for aircraft sales over the next 20 years (after China).

Alabama is a ‘right to work’ state, which means that workers can not be forced to join a trade union. Fabrice Brégier, Airbus’s chief executive, said the company had chosen a
“competitive environment” for its factory, and he described its US investment as a strategic move. “The USA is the largest single-aisle aircraft market in the world, and this assembly line brings us closer to our customers,” he said.

The plan is to increase the company’s share of narrow-body aircraft orders in the USA from 20% to 50%. The factory will start making the A320 family of aircraft in 2015, and it is supposed to be manufacturing up to four jets a month by 2018.

Airbus currently makes 40 A320 aircraft a month at its single-aisle factories in France, Germany and China; it is planning to increase this to 42 aircraft a month from the fourth quarter of this year to fulfil orders from fast-growing Asian airlines and US carriers that are replacing ageing jets.

Trade union leaders in France say they will insist that any increase in production to meet rising demand does not come at the expense of Airbus’ output in Europe. “We want guarantees that they won’t be touching the production rates in Europe,” said Françoise Vallin, an official at the CFE-CGC union.

Boeing said that the new factory would not dilute Washington’s complaint (before the World Trade Organisation) that Airbus had benefitted from illegal subsidies. It added: “While it is interesting once again to see Airbus promising to move jobs from Europe to the USA, the numbers pale in comparison to the thousands of US jobs destroyed by illegal subsidies.”