Mobile leads in race for EADS aircraft facility

The city of Mobile, Ala., is the frontrunner in a fiercely competed bid to become a multimillion-dollar aircraft assembly site for a European defense giant vying to sell aerial refueling tankers to the U.S. Air Force, according to an industry source.

EADS North America will officially announce its selection tomorrow, but the source said yesterday that the company has settled on Mobile.

Lobbying for the plant has been intense over the past several months as lawmakers from four states worked behind the scenes to woo EADS. Whoever the winner is, “they could not talk about it,” said Marc Pelham, a spokesman for Mobile Airport Authority. “We’re sitting on pins and needles to find out about it,” he said.

Rep. Jo Bonner (R) represents Mobile.

Political pressure could lead EADS to change its decision, the industry source cautioned.

The winner of the competition could stand to gain 1,150 jobs and a $600 million investment in an aircraft engineering and assembly plant. In the spring, EADS selected four finalists for the site: Mobile’s Brookley Field Industrial Complex; Stennis International Airport near Kiln, Miss.; Charleston International Airport in S.C.; and the Melbourne International Airport in Florida.

“We need a facility that can grow to be 1.5 million square feet. We need a 9,000-foot runway, and we indicated that we wanted access to a deepwater seaport,” said Guy Hicks, a spokesman for EADS. Hicks refused yesterday to deny or confirm the selection of Mobile.

While the physical attributes of a site are important, the political muscle of a certain state will be a factor in the decision, company officials said. Paris-based EADS, one of the largest defense companies in the world, has been making a strong play for the U.S. defense market, positioning itself as an opponent to the Chicago-based Boeing for the Air Force’s new refueling-tanker program.

Boeing initially won the bid in 2002 to replace the service’s tankers, but the $23.5 billion deal was thwarted as a result of an ethics scandal that landed to Boeing officials in prison and forced the resignation of the Air Force secretary.

To have any claims to such a large contract, EADS has to expand its presence in the United States, which it has been doing in the past two years, and prove that it can build the airframes domestically. If the company does not win the tanker contract, it will just build the engineering center, which will employ about 150 people, mostly aerospace engineers, at salaries of $100,000 and above, according to the company.

Alabama has Sens. Richard Shelby (R) on the Appropriations Committee and Jeff Sessions (R) on the Armed Services Committee. On the House side, it has Reps. Terry Everett (R) and Michael Rogers (R) on the Armed Services Committee and Robert Aderholt (R) and Bud Cramer (D) on the Appropriations Committee.

Last week’s Paris air show gave local communities a last chance to do some prodding. Sens. Sessions and Thad Cochran (R-Miss) went to the show. The Alabama delegation threw a dinner for EADS at the show and continued its courtship during the weeklong event, according to the Alabama Register.

The company’s Spanish subsidiary, EADS CASA, employs about 30 people at a $1 million aircraft maintenance and training complex at Mobile Regional Airport, which serves the U.S. Coast Guard.

Mississippi’s congressional delegation also could hold the considerable clout that EADS might need to secure business in the United States. Republican Sen. Thad Cochran is the chairman of the Appropriations Committee, and fellow Republican Sen. Trent Lott sits on the Commerce, Science and Transportation committee. In the House, Roger Wicker, a Republican, is on the Appropriations Committee, while Gene Taylor, a Democrat, is on the Armed Services Committee.

The site in Mississippi is an hour and a half away from Mobile, potentially close enough for workers to commute, thus amassing two powerful congressional delegations.

Each of the four sites is compelling, Hicks said. “We have visited each site location an awful lot. We have to go about the business of prioritizing and power-ranking the candidates. It is a tough decision,” he said. He added that the company is working to develop an order “at which we are comfortable.”

EADS’s selection for a tanker site comes at a time when the United States and the European Union are trying to avert a bitter dispute over government subsidies to the world’s two biggest airplane manufactures, Airbus and Boeing. EADS is the largest stakeholder in Airbus, whose airframe EADS is planning to use for the Air Force tanker. In late May, the Bush administration went ahead with a case charging the EU with providing illegal subsidies to Airbus. The 25-nation EU quickly filed its own case before the World Trade Organization accusing Boeing of receiving illegal subsidies.

Meanwhile, “Buy American” hawks in the House passed an amendment as part of the defense authorization bill that would not allow any foreign company that receives government subsidies to compete for large U.S. defense contracts. But Senate Armed Services Committee Chairman John Warner (R-Va.) opposes the House language because, he has said, it would stifle competition.