European aircraft maker Airbus Group officially opens its final assembly line in Mobile, Ala., Monday, only the second plant that the company has built outside Europe. The company plans to boost its North American market share from its current level of about 20% to 50%, mostly at the expense of Boeing Co. (NYSE: BA), its Chicago-based arch-rival.
The plant in Mobile cost approximately $600 million and Airbus plans to assemble four A320s a month by the end of 2016. The plant’s maximum production capacity is eight per month, but Airbus has no firm schedule for expanding to that number.
Boeing built an assembly plant for its 777 family in South Carolina, primarily to take advantage of lower labor costs. Boeing employees in South Carolina recently rejected union representation. Alabama, like South Carolina, is a right-to-work state. Some workers are already disgruntled, however, having found out they are being paid less than Airbus assembly line employees in Germany, according to a report from Reuters.
Two Airbus jets, current versions of the best-selling A321, are already being assembled in Mobile. The first plane is set to be delivered to JetBlue in the second quarter of next year and the second is going to American Airlines by the end of 2016.
When the U.S. Air Force sought to replace its aerial refueling tanker fleet in the early part of the 21st century, Airbus proposed constructing a plant in the United States to build the planes. Ultimately the contract went to Boeing, and Airbus came up with the plan to open the assembly line for its most popular plane.
According to a report from Leeham News, the plant currently employs 260 people, including 40 from outside the United States. At its full production rate of eight planes per month, the plant would employ about 1,000 people. Under a reciprocal agreement with European authorities, the planes will be certified by European regulators, not the U.S. Federal Aviation Administration.
The Mobile plant performs final assembly of the planes from parts manufactured outside the United States and shipped to the deepwater port of Mobile and then trans-shipped by truck the final four miles to the assembly plant.
If Airbus ultimately decides to boost total production of its A320 family of planes to 60 per month, Airbus would add a fourth assembly line at its plant in Hamburg, Germany, and “consider doubling output in Mobile” from four to eight.
Airbus claims that the new plant is intended to serve the U.S. market, where the company sees expanding demand for its A321. The company now has four assembly plants: two in Europe, one in China and one in the United States.
Last week Aviation Week reported that Boeing is preparing to shift some of its final assembly work for its 737 jets to China. Boeing has not commented on the report.