Airbus Opens First US Airliner Factory

September 14, 2015

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Airbus has opened its first airliner factory in the US, a USD$600 million plant in Mobile, Alabama.

The plant will help Airbus meet plans to deliver 50 A320-family jets a month by 2017, up from 42 currently. Airbus is considering lifting that to 60 or more to meet a backlog of more than 5,400 aircraft.

Chief executive Tom Enders said he had no concern about a slowdown in demand, including from China's recent economic weakness. If it came, Alabama would not be alone in cutting back.

"We would always do that in a balanced way," he said. "There's no political pressures or anything. But I have no reason that we are slowing down. Our challenge right now is to bring up production."

China in June placed a landmark order for dozens of Airbus wide-body jets, a deal worth at least USD$11 billion at list prices. That order paves the way for a second Airbus plant in China, the world's fastest-growing aviation market.

China also is a major buyer of narrow-body Airbus aircraft, and Airbus has built a factory in China to produce those planes, similar to the one in the United States to serve the North American market.

"Obviously we watch our markets with great interest," Enders said. "But at this point I have no reason to believe that the Chinese market is breaking down or anything like that."

Enders also said Airbus is "happy with the current euro-dollar relationship" and has no plans to change its foreign-exchange hedging strategy.

In the interview, Enders said the US plant, which employs 260, could help with military sales.

"This factory certainly has a lot of industrial credibility," he said. "So should an opportunity arise on the military side some years from now (the factory and workforce) will certainly not hurt our credibility for a military project."

Airbus said it sited the Mobile plant on 116 acres and has an additional 116 acres available nearby for expansion.

Airbus aims to make the US factory its most cost efficient plant. But the bigger payoff is with burnishing its brand as a US manufacturer.

Monday's ceremony included video clips praising Airbus from dozens of US elected officials, airline heads and manufacturing companies.

"The relationship (with Airbus) is already extremely strong," American Airlines Group chief Doug Parker said in a clip. "But them being here doesn't hurt."