We needed to be visible in the States under the Airbus flag," Airbus President and CEO Fabrice Bregier said.
The new $600 million plant will make A320 passenger jets, which compete head-to-head with Boeing's 737. Those planes are the minivans of the airline world — widely-used people-haulers generally flown on short- and medium-haul trips. They generally carry about 150 passengers.
North America is the biggest single market for that type of plane, Airbus executives said, and they want more of it. Boeing's 737 has an advantage now, with Southwest and Alaska Airlines buying only 737s. Current A320 customers include US Airways and Frontier Airlines. American Airlines handed Airbus a victory when it ordered 260 of the planes last year.
Airbus, based in Toulouse, France, cranks out more than 400 of those jets a year, more than any of its other planes.
The new plant advances the company's strategy of expanding production outside its home base. The Mobile operation will join assembly plants in Toulouse, France; Hamburg, Germany; and Tianjin, China.
Labor costs are likely to be lower in Alabama, where union organizing is more difficult than in Europe or in other parts of the U.S. Bregier said cost savings were not the main goal for the Alabama plant, but added, "Clearly we selected a competitive environment."
Building in Alabama helps Airbus cut foreign-exchange costs, as well. Most A320s are built in Europe, so costs are in euros. But planes are sold in dollars because most aviation lending happens in dollars. That cost disadvantage will shrink if Airbus pays to assemble at least some of its planes in dollars.