"The best airplane built in America"
Boeing and Airbus find success in Southern locations
By Trisha Ostrowski
Boeing recently announced that the largest version of its 787 Dreamliner, the 787-10, will be assembled exclusively in North Charleston, S.C. The announcement came at a time when Airbus was nearing completion of a $600 million facility in Mobile, Ala. It's a clear sign Airbus is looking to compete for the American airplane market. And it's also clear that both companies find the South a viable location from which to make that happen.
As U.S. airlines look to replace their aging fleets, these two aircraft giants are squaring up to compete for that business. John Leahy, Airbus Chief Operating Officer, acknowledged the company's desire to compete in the U.S. market. "A good way to get a bigger place in that replacement market is not just to have the best airplane, but to have the best airplane built in America," said Leahy.
Silicon Valley in the Southeast
Boeing is already established on both U.S. coasts, after breaking ground on its second U.S. manufacturing facility in North Charleston in 2009. The facility, configured to make three 787s a month, has easily outpaced the company's expectations. With Boeing's announcement that the 787-10 will be exclusively assembled in the facility, production capacity in North Charleston will actually match the company's Everett, Wash., plant by the end of the decade.
Boeing chose South Carolina initially because company leaders recognized the state's growing presence in the industry. More than 100 aviation and aerospace companies have operations in South Carolina, employing more than 16,000 people. One of the most important benefits the state offers these companies is a highly-skilled workforce. In 2008, CNBC ranked South Carolina second nationally in workforce quality.
"With unprecedented demand for commercial airplanes, including a forecast of another 34,000 airplanes required over the next 20 years, Boeing is positioned for significant and sustained growth in the years ahead," company spokeswoman Candy Eslinger said.
Boeing has already exceeded its initial capital investment and job projections for the campus, employing 6,000 people. David Ginn, president and CEO of the Charleston Regional Development Alliance, estimates the facility's economy impact regionally is $4.6 billion annually. He added, "Boeing's rapid rise from construction to aircraft rollout in two-and-a-half years validates that Charleston offers the competitive advantages the aerospace industry needs to be successful here."
What attracted Boeing to the area initially was the quality workforce and supportive government. As a non-union state, South Carolina offered a qualified and educated workforce to support its substantial and bold production goals. "In order to meet our timeline and satisfy our expectations, we had to have a supportive government and a capable, available and motivated workforce," said Jack Jones, vice president and general manager, Boeing South Carolina. "When we rolled out our first Dreamliner on April 27, 2012, and conducted our first flight on May 23, it was done with a workforce that had never touched an aircraft before."
That initial success led Boeing to reinvest in North Charleston in 2013. After delivering its first Dreamliner from the plant in 2012, the company announced it would invest $1 billion in creating 2,000 more jobs at the plant over the next eight years.
A primary compelling draw for the company was South Carolina's willingness to provide $120 million in additional incentives for upfront costs such as utilities and site preparation, which led Boeing, inevitably, to consider expanding operations locally as success continues.
The company is so pleased with the work being done in North Charleston that it recently asked community officials to approve rezoning an additional 466 acres of land to develop an "Aerospace Campus." City Planner Charles Drayton said, "They're building a corporate atmosphere, more than just an industrial park." New zoning for the park would enable the company to include restaurants, retail businesses, child care, health and postal facilities within the campus. It's scheduled to be a similar environment to several "Silicon Valley" spaces.
The proposed campus expansion is a sign of how much value the company places on its partnership with local government. "We had to have a favorable business environment, logistics and infrastructure," Jones said. "And it was important that our plant be environmentally responsible. Our goal here is zero waste to landfill."
"Made in America" value
Because Airbus wanted to compete with Boeing for the airplane replacement market in the U.S., company leaders recognized that they needed a manufacturing presence here. "All things being equal, even if we have a better product, they tend to stay with a U.S. manufacturer," Leahy said.
As company leaders looked for a location to initially invest, they found a perfect fit in Alabama, specifically the 1,650-acre Brookley Industrial Park. "Brookley is situated right in the center of the Gulf Coast aerospace corridor, and the Airbus facility sets up to be the nucleus of that corridor," said Bill Sisson, formerly the executive director of the Mobile Airport Authority.
North Alabama already has strong ties to aerospace, with NASA's Marshall Space Flight Center in Huntsville and a Delta rocket factory in Decatur. The $600 million Airbus factory will employ 1,000 people beginning in 2015. "This represents the real transformation of Airbus into a truly global company," Airbus CEO Fabrice Bregier said, noting that it joins the company's other assembly lines in Hamburg, (Germany), Toulouse (France), and Tianjin (China).
Brookley is the site of a former Air Force base on which Airbus already had an engineering facility. It's a natural progression for the company, and a clear sign that it looks to compete with Boeing for the U.S. market.
Alabama Secretary of Commerce Greg Canfield said the $600 million facility would bring "real change in the lives of individuals and families in that region." That includes the expectation that it will generate 1,000 new jobs. "It represents a real opportunity, and real change in the lives of individuals and families in that region, who are able to begin or work in careers that offer very competitive salaries and benefits," Canfield said of the Airbus facility. "For individuals, it means opportunity, the ability to fulfill dreams and provide for the future of their children. It means economic expansion for those communities, too."
Currently, Alabama is home to 83,000 aerospace-related workers for 400 aerospace companies. Airbus' facilities will add to that. But the state sees the Airbus facility as the lynchpin of that growing industry.
These companies are invariably drawn to the state's low taxes, excellent workforce training and pro-business government. Those highly attractive advantages added to Airbus' desire to make American planes at an American facility. "With a final-assembly line here," Leah said, "that lets us become a U.S. manufacturer of aircraft with U.S. jobs."
Both Boeing and Airbus recognize that the aircraft replacement market in U.S. aviation is prime real estate. And both companies understand that winning in that market requires that they produce exceptional products efficiently and cost-effectively. The decision, in both cases, was easy. North Charleston and Mobile each provided an excellent, skilled workforce, first-rate infrastructure, low business costs compared with other parts of the country, and pro-business local government. And both companies already clearly see their decisions paying off.