EVERETT — The Puget Sound region gained an aerospace rival when the Boeing Co. lost a $35 billion tanker contract last week.
Everett, meet Mobile, Ala., the country’s newest home to a major jet assembly factory.
That’s where Northrop Grumman and European Aerospace Defence and Space Co. will assemble 179 aerial refueling tankers for the U. S. Air Force. As the parent company of Boeing commercial rival, Airbus, EADS also has promised to place the final assembly line of the A330 freighter in Mobile, giving the South an even bigger slice of the global aerospace pie.
The move creates the “first new large commercial aircraft assembly facility in the U.S. in over 40 years,” says Tom Enders, the chief executive of Airbus.
Snohomish County residents need only drive the Boeing Freeway to glimpse the country’s leading aircraft factory. But should Puget Sound area residents be worried about a competitive tide rolling Alabama’s way?
Not yet, analysts say. Northrop-EADS will build monthly one to two Air Force tankers, which are based on the commercial A330 in Mobile. Separate from the government contract, EADS and Airbus plan to assemble as many as three A330 commercial freighters each month at the same plant.
“At four or five (total) planes a month, I hardly see that as a major aerospace center,” said Scott Hamilton, an analyst with the Leeham Co.
Boeing’s factory in Everett turned out an average of more than nine widebody jets monthly in 2007. That’s to say nothing of the work Boeing employees are doing on the new 787 Dreamliner, which will go through final assembly at a rate of about 10 monthly. And the company’s nearby factory in Renton produced 330 single-aisle aircraft, 737s, in 2007.
Aerospace centers don’t crop up overnight.
Analyst Richard Aboulafia, with the Teal Group, addressed the aerospace center question last month when speaking at an industry conference in Lynnwood. Major aerospace clusters take time to build, partly because it takes alliances with government and education to provide a skilled work force, Aboulafia said.
In Washington, roughly 110,000 people work in aerospace with about a third of those in Snohomish County. Boeing alone employs 74,000 people in the state.
Boeing officials got in hot water with Alabama lawmakers when they insinuated over the course of the tanker competition that the state’s work force wasn’t experienced enough to build jets. Alabamans found the comments particularly galling, considering that Boeing had considered the state when it was looking for a final assembly site for its new 787 Dreamliner. Thanks to a $3.2 billion in tax incentives, Boeing eventually decided to keep its jet-manufacturing in one central location in the Puget Sound area.
The Chicago-based company has workers in Alabama, too. However, the Boeing’s 3,000 employees make up only a small percentage of the state’s estimated 73,000 aerospace workers. The Northrop tanker contract could bring more than 5,000 aerospace jobs across the state.
“The decision by Northrop-Grumman-EADS to manufacture the KC-30 in Mobile was a clear endorsement of our state’s work force,” said U.S. Sen. Jeff Sessions, R-Ala., in a press statement. The award “represents a huge investment in our state.”
Besides Boeing, several major aerospace players have sites in Alabama, including Lockheed Martin, Mobile-based ST Mobile Aerospace Engineering Inc., a maintenance, repair and overhaul operation akin to Everett’s Aviation Technical Services, and Alabama Aircraft Industries — the company formerly known as Pemco Aviation Group, which successfully protested an Air Force contract awarded to Boeing. And, of course, there’s EADS new Airbus Engineering facility in Mobile, opened to assist with design work on the A350 jet.
Alabama’s 300 aerospace companies might not yet rival Washington’s 600, but it does get a boost from the tanker contract. Certainly, the state’s political leaders will expound the benefits of locating in Alabama, as Washington’s lawmakers tried to do with the 787 tax initiatives. Only a handful of companies moved to the state.
What does Alabama have to offer? State business groups boast that Alabama offers the lowest property taxes in the nation, affordable electricity rates and low corporate income tax burdens. The state, as it did with EADS, provides various tax incentives. As a right-to-work state, Alabama doesn’t have the labor union presence that Washington does.
Those benefits were enough to lure ThyssenKrupp last May to announce it would build a $3.7 billion steel plant in Mobile County. The company’s choice caught the eye of the folks at Moody’s Economy.com. In January, Moody’s predicted the Mobile metropolitan area will have the fastest-growing economy of any in the country over the next five years.
Alabama’s string of business successes gave its politicians, including U.S. Rep. Jo Bonner, R-Ala., reason to believe the state has a bright future. The Northrop-EADS win, Bonner said, put the state in the global aerospace spotlight.
“Throughout this process, the city of Mobile, the state of Alabama, and indeed the entire Gulf Coast region have garnered worldwide attention for an emerging aerospace industry,” Bonner said. “People around the world have come to identify our city and our state with aerospace excellence as a result of this competition.”
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
