Airbus, the European commercial airplane giant, is spreading its wings further into the U.S. with a new final assembly plant in Mobile, Alabama.
The company announced the new plant with state and local leaders in Alabama. Airbus is investing $600 Million into building the plant which will eventually employ approximately 1,000 workers. After considering a final plant in the U.S. for seven years, the European plane maker finally decided to commit to the U.S.
“The town is right, the talent is right, and the time is right,“ said Fabrice Bregier, CEO of Airbus.
For Alabama, the U.S. and Airbus adding a final assembly plant in Mobile is a big deal. Commercial airplane final assembly plants are among the most coveted manufacturing operations in the world, primarily because they generate so many jobs directly and indirectly. Another factor is the scarcity of commercial airplane final assembly plants. For Airbus, this will be just its fourth in the world, joining one in Germany, one in France, and another in China.
“This will shape the future of the region for years to come,” said Alabama Governor Robert Bentley.
For the U.S. economy and manufacturers, the Alabama plant is confirmation that the cost and efficiencies of building original products in the U.S. makes sense for global companies. While the U.S. used to be considered too expensive for many manufacturers, the lower dollar combined with skilled labor and manufacturing efficiencies now make building in the America a smart decision.
The new plant is expected to be up and running by 2015 when it will start producing new Airbus A320 models. The A320 is a popular narrow body plane flown on short and medium haul routes. Airbus has 3,293 on backlog and that number could grow later this decade as airlines around the world upgrade from older A320 models to the new A320neo, which will be 15 percent more fuel efficient. The A320 family is also at the heart of an intense battle between Airbus and Boeing for dominance of narrow body plane market.
In announcing the new plant in Mobile, Airbus CEO Fabrice Bregier acknowledged American Airlines , U.S. Airways and Virgin America have ordered Airbus planes.
-By CNBC's Phil LeBeau