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Airbus's U.S. Plan Is a Long-Term Gamble

Ahlevah

Ahlevah

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Airbus, the European plane maker, plans to build its first U.S. assembly line in Mobile, Alabama, in an aggressive foray into the world’s largest market for single-aisle airplanes, several people with knowledge of the plan have said.

The plan, which has not yet been approved by the board of European Aeronautic Defense & Space, Airbus’s parent company, calls for an investment of several hundred million dollars in a plant on Boeing’s home turf that could eventually assemble dozens of Airbus’s popular 150-seat A320 jets each year. Details are expected to be announced by the new Airbus chief executive, Fabrice Brégier, at a news conference in Mobile on Monday, said the people, who spoke on condition of anonymity because the plan was confidential.

http://www.nytimes.com/2012/06/29/b...lan-is-a-long-term-gamble.html?pagewanted=all​
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Bubba for the win once again! More high-tech manufacturing for the South. Thank you, Jesus--and Airbus!


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This is gonna get blocked I bet. Boeing is to big and powerful to allow its only real competitor to set up shop in its back yard. And if not blocked, then the subsidies to Boeing will increase.... in other words, the average American is screwed regardless.
 
PeteEU said:
This is gonna get blocked I bet. Boeing is to big and powerful to allow its only real competitor to set up shop in its back yard. And if not blocked, then the subsidies to Boeing will increase.... in other words, the average American is screwed regardless.
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I don't see how Boeing can stop it, but I have to give the company credit for being nothing short of creative. In any case, I'm more concerned about screams coming from Europe about jobs leaving the continent, even though the idea is to expand Airbus' penetration into the U.S. airliner market.
 
Ahlevah said:
I don't see how Boeing can stop it, but I have to give the company credit for being nothing short of creative. In any case, I'm more concerned about screams coming from Europe about jobs leaving the continent, even though the idea is to expand Airbus' penetration into the U.S. airliner market.
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Boeing had its lackeys in Congress block the tanker deal .. twice when it was awarded to Airbus.. do you really think that this will be any different?
 
PeteEU said:
Boeing had its lackeys in Congress block the tanker deal .. twice when it was awarded to Airbus.. do you really think that this will be any different?
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Congress didn't block the tanker deal, it was never awarded to Airbus in the first place. The Air Force went with Boeing "based on the superiority of its design, technology, delivery schedule, and overall risk reduction plan." Airbus tried and failed to get them to change their minds.

Source

I welcome an Airbus facility in the U.S. - as long as they're ethical in their business practices of course.
 
PeteEU said:
Boeing had its lackeys in Congress block the tanker deal .. twice when it was awarded to Airbus.. do you really think that this will be any different?
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Yes this is very different from an American perspective. This action would directly take jobs out of Europe and move them to the U.S. Actually I am surprised you think it will be blocked here versus over in Europe.
 
Binary_Digit said:
Congress didn't block the tanker deal, it was never awarded to Airbus in the first place. The Air Force went with Boeing "based on the superiority of its design, technology, delivery schedule, and overall risk reduction plan." Airbus tried and failed to get them to change their minds.

Source

I welcome an Airbus facility in the U.S. - as long as they're ethical in their business practices of course.
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Bull****. The tanker deal is an epic scandal of national bias.

First Boeing was award the contact but it was then cancelled when people found out that there was massive corruption involved in getting the deal.

Then Airbus got the contract after another round of bidding, but that pissed of Congress so much that investigations and what not were started and the deal yet again was cancelled.

Finally Boeing was awarded the contact yet again, in large part to "friendly" congressional nationalism.
 
washunut said:
Yes this is very different from an American perspective. This action would directly take jobs out of Europe and move them to the U.S. Actually I am surprised you think it will be blocked here versus over in Europe.
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Has nothing to do with jobs. Boeing could give a rats ass about US jobs. Having your own main competitor in your backyard and biggest market, producing it jets at a lower price than normal will be a huge problem for Boeing. And then there is the technology aspect.. Airbus has been ahead here for years, and ahead in sales as well, while Boeing has been riddled with delays to its new aircraft plus various scandals, including the whole tanker thing.

In the end, Airbus might be allowed to set up shop, but it will come at a cost to the US taxpayer since Boeing will need to be compensated some how.. so expect to see "cost overruns" of epic proportions on say the tanker deal and other military aircraft.

Also it is not "jobs lost" in Europe per say... since Airbus is lacking capacity some what since it is outselling Boeing.
 
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Binary_Digit said:
Congress didn't block the tanker deal, it was never awarded to Airbus in the first place. The Air Force went with Boeing "based on the superiority of its design, technology, delivery schedule, and overall risk reduction plan." Airbus tried and failed to get them to change their minds.

Source

I welcome an Airbus facility in the U.S. - as long as they're ethical in their business practices of course.
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Here's what happened. The Air Force originally was going to lease Boeing tankers. Then there was a bid-rigging scandal. Heads rolled. (The number-two procurement official at the Pentagon and Boeing's CFO went to prison. The company's CEO, Phil Condit, resigned.) Congress had the contract pulled. The Air Force then decided it wanted to buy tankers instead. Northrop-Grumman and Airbus' parent, EADS, submitted a joint bid to assemble tankers in Mobile, Alabama based on an Airbus design. Northrop-EADS won because, frankly, the EADS tanker was a better plane. (It had a larger capacity and could fly further.) Boeing cried foul, said the contract criteria were unclear, and beat the congressional war drums. Congress put enough heat on the Air Force until it finally gave in and said it would put the contract up for bid for a third time. Boeing won. Now it looks like EADS is still interested in gaining a foothold in North America in order to sell commercial aircraft to U.S. airlines, which fly about 80% Boeing aircraft.
 
PeteEU said:
Has nothing to do with jobs. Boeing could give a rats ass about US jobs. Having your own main competitor in your backyard and biggest market, producing it jets at a lower price than normal will be a huge problem for Boeing. And then there is the technology aspect.. Airbus has been ahead here for years, and ahead in sales as well, while Boeing has been riddled with delays to its new aircraft plus various scandals, including the whole tanker thing.

In the end, Airbus might be allowed to set up shop, but it will come at a cost to the US taxpayer since Boeing will need to be compensated some how.. so expect to see "cost overruns" of epic proportions on say the tanker deal and other military aircraft.

Also it is not "jobs lost" in Europe per say... since Airbus is lacking capacity some what since it is outselling Boeing.
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Thats an interesting point Pete Boeing has alot of political support here...it may be creation of some jobs and the loss of some others...stopping it entirely, umm I dunno in this climate.
 
Airbus see's rising protectionist sentiments in America. Moving plants into the US is the only way to bypass the inevitable Tariffs.

What happens, like in all other foreign manufacturing plants that move here, is that they run on skeleton crews on idle waiting for the moment Protectionism comes back.
 
Matt Foley said:
Airbus see's rising protectionist sentiments in America. Moving plants into the US is the only way to bypass the inevitable Tariffs.

What happens, like in all other foreign manufacturing plants that move here, is that they run on skeleton crews on idle waiting for the moment Protectionism comes back.
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Considering that it got ganked on the tanker contract by Boeing, I can't blame EADS. Besides access to the U.S. market, another consideration has to be the cost of production: No unions to deal with in a right-to-work, "at will" employment state.
 
Ahlevah said:
Considering that it got ganked on the tanker contract by Boeing, I can't blame EADS. Besides access to the U.S. market, another consideration has to be the cost of production: No unions to deal with in a right-to-work, "at will" employment state.
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....and all this talk about unions and stuff means nothing while these plants run on idle waiting for Tariffs.
 
lpast said:
Thats an interesting point Pete Boeing has alot of political support here...it may be creation of some jobs and the loss of some others...stopping it entirely, umm I dunno in this climate.
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This plant will take years to set up and get permissions for. Once the election is over, then you have 2 years to block this deal. After all blocking the tanker deal by Congres and giving it to Boeing also cost "new jobs" since many parts of the Airbus tankers were to be made in the US.
 
PeteEU said:
Bull****. The tanker deal is an epic scandal of national bias.

First Boeing was award the contact but it was then cancelled when people found out that there was massive corruption involved in getting the deal.

Then Airbus got the contract after another round of bidding, but that pissed of Congress so much that investigations and what not were started and the deal yet again was cancelled.

Finally Boeing was awarded the contact yet again, in large part to "friendly" congressional nationalism.
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I can see you know positively Jack and s#!t about this and Jack left town.

I will enlighten you.

2004 1st contract was a airplane lease deal the WAS stupid from the get go. An ex Air Force procurement Officer and a Boeing director went to jail for corruption.

2008 2nd contract awarded to Airbus but Boeing filed a protest because the Air Force kept changing the contract requirements to favor the Airbus plane. Boeing's protest was upheld and the contract was rebid. Congress had nothing to do with this other than blustering in the Media this was the GAO that made the decision.

2010 3rd contract awarded to Boeing based on the merits of the plane. There is very close scrutiny of the schedule and costs this time around.
 
mtlhdtodd said:
2010 3rd contract awarded to Boeing based on the merits of the plane. There is very close scrutiny of the schedule and costs this time around.
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The Airbus was a better plane; it had more capacity and longer range. Too bad politics had to cloud the selection process:

Military planners likely concluded in devising rules for the current contest that a Boeing tanker, made in Seattle and supported by Democrats, stood a greater chance of quickly gaining funding from a Democrat-controlled Congress than EADS' Republican-backed tanker, said aerospace analyst Richard Aboulafia.

Boeing could face a foreign invasion in tanker bidding - Chicago Tribune
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Boeing and Air Bus produce roughly 1,000 planes annually, with an average price tag of $ 100 million. Over time, the split has favored Boeing 60-40.

Boeing's move to South Carolina was brilliant. They become much more competitive with SC labor costs and tax incentives, state, local, property tax abatements. They get their entire supplier base to follow the move, this allow them to benefit in their parts purchasing and create an efficient supply line. They also benefit from a much younger population of new hires, with better health profiles, lower health benefits, and cheaper health costs in the state.

Objectives are clearly to either push airbus down to a lower share or force the Europeans to provide more subsidies. This is a dollar market where Airbus competes with Euro-based costs. The Euro has gone from parity to 1.25 over the last 5 years. This means that with a 100 million dollar airplane, which made 20 million dollars profit on parity five years ago, assuming 60 million of Euro costs, at 1.25, total cost of production have increased by 15 million on that transaction alone. This means a loss is being felt by Airbus.

Boeing has streamlined its production into Right to Work states to reduce costs. The SC move coincided with the transition of fuselage production to Italy and Texas. he next move was to buy back, five years after being certified by the FAA, Vought’s plant for the 787 as well as 50% of Vought’s share in Global Aeronautics. The company then made the commitment to increase production of the 787 from 120 units to 240, with an additional plant on the SC site

Boeing and Air Bus are not the only players in the game. The Brazilians in particular have become a major entity in the market, with clear cost advantages. The Congress will not opposed to FDI.
 
I wonder how the Southerners feel about being Cheap-Domestic-Labor pool?


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"We're cheap and proud of it."

"You tell them scooter, uh huh."
 
mtlhdtodd said:
I can see you know positively Jack and s#!t about this and Jack left town.

I will enlighten you.

2004 1st contract was a airplane lease deal the WAS stupid from the get go. An ex Air Force procurement Officer and a Boeing director went to jail for corruption.

2008 2nd contract awarded to Airbus but Boeing filed a protest because the Air Force kept changing the contract requirements to favor the Airbus plane. Boeing's protest was upheld and the contract was rebid. Congress had nothing to do with this other than blustering in the Media this was the GAO that made the decision.

2010 3rd contract awarded to Boeing based on the merits of the plane. There is very close scrutiny of the schedule and costs this time around.
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I see the GOP propaganda machine has done its magic.. how about looking at the facts? The Airbus plane was the better plane.. its only drawback.. it was not Boeing.
 
Matt Foley said:
I wonder how the Southerners feel about being Cheap-Domestic-Labor pool?

"We're cheap and proud of it."

"
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"I feel Good! I knew that would." ;)
The low cost of living here, and available jobs, mean just everyone who wants to buy a house and raise a family can.
An added advantage to me, is that the water I fish in, Stays liquid, ALL year round.
 
longview said:
"I feel Good! I knew that would." ;)
The low cost of living here, and available jobs, mean just everyone who wants to buy a house and raise a family can.
An added advantage to me, is that the water I fish in, Stays liquid, ALL year round.
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They cant buy a house, since banks dont lend to poor people....:)
 
Matt Foley said:
I wonder how the Southerners feel about being Cheap-Domestic-Labor pool?
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Southerners have always been America's cheap labor pool. Nothing new there. But I can tell you Mississippians are thrilled to be assemembling Toyota Corollas in Blue Springs and American Eurocopter (EADS) Lakotas in Columbus. It's immensely more rewarding than plucking chickens or stuffing sofas. Pays more, too.
 
lpast said:
Boeing has alot of political support here...
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Detroit automakers had a lot of political support here, too, back in the 1980s when they didn't like Japanese automakers invading their market. So they pushed for domestic content legislation that spurred the Japanese and Europeans to build plants largely in right-to-work states in the South. Detroit was unsuccessful in stopping the transplants. Boeing will be unsuccessful, too, if it tries to protect its high-priced union workforce in Everett. It also will have a harder time crowing about a supposed cost advantage as EADS moves to increase its supply chain here. This plant will have ripple effects way beyond the $600 million EADS is investing.
 
Ahlevah said:
Detroit automakers had a lot of political support here, too, back in the 1980s when they didn't like Japanese automakers invading their market. So they pushed for domestic content legislation that spurred the Japanese and Europeans to build plants largely in right-to-work states in the South. Detroit was unsuccessful in stopping the transplants. Boeing will be unsuccessful, too, if it tries to protect its high-priced union workforce in Everett. It also will have a harder time crowing about a supposed cost advantage as EADS moves to increase its supply chain here. This plant will have ripple effects way beyond the $600 million EADS is investing.
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There is a difference.. auto makers employ tens if not hundreds of thousands of people.. air line makers employ in the single digit thousands... barely over 1000 I believe in this US plant. The annual production will be maybe at its peak.. 40 planes.
 
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