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ANALYSIS: US South rises on Airbus, Boeing expansion

Discussion in 'Latest Airline News' started by AeroDon, Feb 4, 2015.

  1. AeroDon

    AeroDon Administrator

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    A 787 coming off the line at the Boeing plant

    What a difference a decade makes in the geography of the US aerospace industry. It was only 2004 when the US southeast region was known in aerospace circles primarily as a base for NASA in Florida and Alabama and a manufacturing hub for Gulfstream business jets and Lockheed Martinfighters and airlifters in Georgia.

    Assembling commercial airliners in the southeast region – a multistate area shaped by the Mississippi River in the West, Atlantic Ocean in the east, the Ohio River in the north and the Gulf of Mexico in the south – was not only non-existent. It was not even seriously contemplated by anyone anywhere in the industry.

    Boeing vice-president and general manager Jack Jones now oversees a sprawling factory complex in North Charleston, South Carolina, with 7,500 employees on the payroll and still hundreds of acres of empty land under the company’s control. As late as the end of 2003, however, such a scenario would have seemed inconceivable to a veteran of Boeing’s commercial base in the Pacific Northwest.

    “Twelve years ago it wasn’t even a gleam in some Boeing leader’s eye,” says Jack Jones, who retires in April. “There was no need to consider building outside Puget Sound.”

    In 2004, Boeing’s vision for the region changed irrevocably, but not in the way it originally intended. That was the year two key Boeing suppliers for the 787 programme – Global Aeronautica, a joint venture of Alenia Aeronautica and Vought and Vought by itself – announced plans to assemble the aft and centre fuselage sections in North Charleston.

    The announcement established Boeing’s first connection to South Carolina, but only tangentially. It would take another five years and a series of traumatic events, including an industrial breakdown by Global Aeronautica and a union strike in Puget Sound to finally push Boeing to build aircraft in South Carolina.

    The same unlikely series of events drew Airbus to the region. In 2005, the European manufacturer teamed with Northrop Grumman to build a military tanker version of the A330 in Mobile, Alabama. Airbus also expected to build the commercial freighter version of the A330 in the same complex. Although the Airbus bid for the US Air Force tanker contract was ultimately defeated in 2011, the company decided a year later that Mobile would make a good location to build A320s. The final assembly line is scheduled to begin operations in July, deliver the first aircraft in April 2016 and ramp up to four deliveries per month by 2018.

    “I think we’ll beat 2018 on the four-a-month target,” says Allan McArtor, chairman and chief executive of Airbus Group, Inc, the US-based subsidiary.

    Boeing began delivering 787s from North Charleston in May 2012. As Airbus ramps up to building four A320neo family aircraft per month in Mobile by 2018, Boeing plans to ramp up 787 production to seven per month before 2020. Within less than a decade, the US southeast will become a major commercial aircraft manufacturing hub, rivalling only Puget Sound and Airbus’s assembly hubs in France and Germany.

    Airbus and Boeing are actually among the last aerospace manufacturers to recognise the appeal of the US southeast. In the past decade, Airbus has opened a design centre in Alabama and a military and civil helicopter factory in Mississippi; Spirit AeroSystems has opened a factory supporting A350production in North Carolina; Embraer has started assembling Phenom business jets and will soon begin assembling Legacy 450/500 jets in Florida and Honda Aircraft has erected a factory in North Carolina to begin ramping up production after the HondaJet obtains an airworthiness certificate.

    Meanwhile, existing aerospace manufacturers in the southeast have bolstered their presence in the past two years. Lockheed offset the closure of the F-22 assembly line in Marietta, Georgia, by shifting assembly of the F-35 centre wing box assembly from Fort Worth, Texas. Gulfstream announced in October that it will expand in Savannah by launching production of the G500/600 jet family, which includes insourcing wing assembly work previously performed by Spirit AeroSystems in Oklahoma.

    The growth in the US southeast is not limited to assembly and manufacturing work. The region is also attracting engineering talent. Northrop Grumman, for example, selected Melbourne, Florida, in 2014 for Project Magellan, a highly sought-after aerospace design centre. A year earlier, Boeing decided to expand in Huntsville, Alabama, choosing its missile defence business hub for Project Bright Minds, an engineering and design centre for Boeing Research and Technology.

    If an aerospace company has opened a new site anywhere in the USA over the next five years, it has almost exclusively been somewhere in the US southeast.

    The appeal of the region is often linked to the absence of organised labour. With the exception of Lockheed’s factory in Marietta, the aerospace industry’s expansion in the region has so far evaded the efforts of union organisers. But labour’s absence does not fully account for the region’s appeal.


    Ringed by coastlines, the southeast boasts multiple deepwater ports and close access to overwater airspace that is ideal for flight tests of new aircraft prior to delivery. A large supply of active and shuttered military bases, meanwhile, offer a ready supply of trained mechanics and long runways.

    “Logistically, [Mobile] is ideal for us,” McArtor says. “A deepwater port is right next door to the airport. It’s got a good runway and Gulf airspace for flight test.”

    On top of the logistical advantages, the US southeast is perhaps unusually welcoming to hosting big manufacturers, especially if they make aircraft.

    Southern states have offered generous subsidies to aerospace companies. Alabama promised to give $158 million to Airbus, including building a $52 million centre for on-site worker training, for hosting the A320neo final assembly building in Mobile. North Carolina offered $250 million in subsidies, including workforce training worth $136 million, to Spirit AeroSystems to open the major component assembly factory for the A350 in Kinston.

    South Carolina topped all the other statues by giving $900 million in tax breaks, plus $33 million for free worker training.

    The US southeast, of course, is not unique in this respect. Washington state officials extended to Boeing tax breaks and new subsidies over the next decades worth $7.8 billion in return for keeping 777X assembly and establishing the widebody programme’s composite wing fabrication facility exclusively in Puget Sound.

    More.. http://www.flightglobal.com/news/articles/analysis-us-south-rises-on-airbus-boeing-expansion-408280/
     
  2. Drjohn

    Drjohn Hangar Bronze Member II

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    Originally being from that described U S geography quadrant, I fully understand the accelerating manufacturing move to the southeast.
    Generally people there historically are of a milder nature thereby not as supportive of organized labor movements. They seem to be more independent and prefer to fend for themselves; therefore don't care for
    the expensive assistance from unions. Assistance that proves time and time again, over time, to be worthless. i. e. wages/benefits are comparable, no lengthy black rat strikes that sap self worth and are expensive to employee and employer alike! We are not talking about the 1800's here. Add in the milder climate, lower cost of living, pot holeless
    roads, less traffic congestion, lower taxes, and you have it...I know that I'm returning ASAP....to a few acres, low taxes, and nice people....people that have their feet firmly planted in a country they love and will defend it against all evil both foreign and internal....
     
  3. Brent Heiss

    Brent Heiss Hangar Bronze Member VI

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    Roll Tide Roll....
     
  4. Lord Leighton

    Lord Leighton Hangar Gold Member I

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    Brent Heiss was rather active in here until Airbus gained their first toehold in USA manufacturing process. Somethin tells me that was a stage name for someone who was instrumental in its start up cause he disappeared after.
     
    Everett 757 likes this.
  5. Everett 757

    Everett 757 Hangar Silver Member VI

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    I noticed that same thing.
     
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