Business

July 9, 2012

Airbus-Alabama’s Future – Airbus impact like Mercedes

by Phillip Rawls
Associated Press

The governor who recruited Mercedes-Benz to Alabama said the Airbus plant in Mobile could have the same transforming effect on the state that Alabama’s first auto assembly plant had without creating a political backlash over the $158 million the state is paying to secure the plant.

Former Gov. Jim Folsom said the aerospace industry was already a major factor in the state’s economy before Airbus announced it would build its first U.S. assembly plant in Mobile.

“But this puts us in another league. We will be one of the top aerospace states in the country,” he said in an interview with The Associated Press.

For Airbus, the $600 million plant is an opportunity to compete with Boeing on its home turf. For Alabama, it’s a marquee industry with a name that’s recognized worldwide.

“It puts us on the map in the world markets as a place to do business,” Folsom said.

In 1993, Folsom shocked the international business community when he persuaded Mercedes-Benz to build its first American assembly plant in Vance. Mercedes’ praise of Alabama’s non-union workforce helped recruit other industries. Honda and Hyundai picked Alabama for assembly plants, and Toyota built an engine plant.

The auto industry now accounts for 35,000 jobs in the state.

Folsom said Mercedes-Benz got people to look at Alabama in a different way, which led to more companies of all types considering the state for plants.

“Sometimes these announcements create a climate that you can’t quantify in dollars,” he said.

Gov. Robert Bentley noted that July 2 when he joined Airbus officials in Mobile for the announcement.

“I believe Alabama has the opportunity to build on the economic foundation of the aviation and aerospace industry – just like what we’ve done with the automotive industry,” he said.

Alabama’s aviation and aerospace industry already provides 36,000 private sector jobs and 37,000 federal jobs, with the biggest concentrations around Huntsville in northern Alabama and Fort Rucker in southeastern Alabama.

The Airbus plant is supposed to employ 1,000 people when at full production, with another 3,700 jobs created at suppliers, according to the state government’s estimates.

To get those jobs, the state government is providing $124.9 million in economic incentives and the city of Mobile, Mobile County and the Mobile Airport Authority are adding $33.6 million, for a total of $158.5 million.

That includes initial bond payments, cash, site preparation for the plant and employee training. In addition, Airbus will get the same breaks on state sales, property and income taxes that other new industries receive. The state government estimates those will be worth at least $19 million, depending on the plant’s profitability.

It’s less than the $253 million package that Folsom offered in 1993 for Mercedes. The size of that package drew criticism from many, including Folsom’s Republican opponent, Fob James, who ended up defeating the Democratic incumbent in 1994.

Once the Mercedes-Benz plant opened in 1997 and other auto plants followed, criticism of the incentives disappeared, and people began referring to Folsom as the father of Alabama’s auto industry.

Folsom said he doesn’t expect Bentley to get any of the criticism he faced in 1993 because Alabamians have become accustomed to putting up big money to get big employers.

After all, no one said much in 2007 when former Gov. Bob Riley promised a state record $811 million in incentives for the ThyssenKrupp steel mill at Calvert that now employs 2,300.

“We are past that. With the development of the automotive industry in the state, people realize it’s well worth the incentives,” Folsom said.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines November 21, 2014

News: Dempsey lays groundwork for larger 2016 defense budget - The top U.S. military official on Wednesday made the case for growing the base defense budget significantly over the $535 billion spending cap imposed by Congress for fiscal 2015.   Business: Boeing can bill $61 million that Pentagon withheld for months - The Pentagon withheld $60.5 million...
 
 

News Briefs November 21, 2014

Obama aide: U.S. should look at Ukraine military aid A senior aide of President Barack Obama says he believes the U.S. should consider giving Ukraine lethal, defensive military assistance to get Russia to think twice about its destabilizing behavior. Tony Blinken, the deputy national security adviser, cites serious violations by Russia of agreements not to...
 
 
Air Force photograph by SrA. Divine Cox

Kunsan AB hosts Exercise Max Thunder 14-2

Air Force photograph by SrA. Divine Cox A South Korean air force F-15 Strike Eagle lands Nov. 17, 2014, during Max Thunder 14-2 at Kunsan Air Base, South Korea. U.S. Air Force, Army, Marine Corps and Navy personnel and aircraft...
 

 
LM-facility

Lockheed Martin opens Surface Navy Innovation Center

Lockheed Martin has opened the Surface Navy Innovation Center in Moorestown, N.J., to support the development of new technologies for the U.S. Navy. The SNIC is a research, development and demonstration facility that brings tog...
 
 
raytheon-test

Raytheon successfully demonstrates integrated electronic warfare capabilities

EL SEGUNDO, Calif. – Raytheon, in collaboration with the U.S. Navy, successfully demonstrated an end to end, first of its kind, integrated electronic attack system during flight tests at the Naval Air Weapons Station Chi...
 
 

Three bases identified as F-16 aggressor candidate bases

U.S. Air Force photo by Tech. Sgt. Joseph Swafford Jr. A U.S. Air Force F-16 Fighting Falcon fighter aircraft assigned to the 18th Aggressor Squadron lands at Eielson Air Force Base, Alaska, Oct. 6 during RED FLAG-Alaska 15-1. RF-A is a series of Pacific Air Forces commander-directed field training exercises for U.S. and partner nation...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>