By Arthur I. Cyr
Americans need jobs, and Europeans are coming to the rescue.
Airbus, a unit of the European Aeronautics, Defence & Space Co., last week announced it would open a new assembly plant in Mobile, Ala.
The facility is expected to quickly provide about 3,000 construction jobs, and it's expected to employ 1,000 people when it reaches full production. The welcome employment news proved a magnet for Gulf Coast politicians, who surrounded Airbus executives for Monday's announcement.
Airbus intends to use the Alabama manufacturing plant ― its first in the U.S. ― to expand in the North American market, especially in replacing aging jet aircraft. Airbus, based in Toulouse, France, is the world's largest manufacturer of civilian aircraft, with 53 percent of the global market and 20 percent of the enormous American market.
Its Alabama plant will produce the workhorse A320 passenger jets, with first deliveries scheduled for delivery to customers in 2016.
The Airbus consortium for years has been a prime target for critics in Congress and elsewhere of alleged unfair collusion and anticompetitive practices. Company planners no doubt hope the new plant will help blunt such attacks.
Its principal rival, Boeing, is speeding up production of an upgraded Boeing 737, the counterpart to the Airbus A320, and appears well positioned to do commercial battle. In April, this company posted a 58 percent increased in first quarter profits.
The U.S. corporation has a narrow advantage for long-haul jets, while Boeing and Airbus evenly divide the market for medium-range aircraft. The global market is estimated at $100 billion annually.
This world market is projected to expand dramatically in the coming years.
Airbus estimates that North America will require at least 4,600 single-aisle planes over the next two decades. These sales are anticipated to total at least $300 billion in value. The A320 and 737 are in this category.
On Tuesday, Boeing released its forecast of the global airline markets' expansion, doubtless timed at least in part to distract from Airbus' dramatic news out of Alabama. Company representatives said they anticipate 34,000 new jet airplanes will be required worldwide over the next two decades, with associated estimated sales worth $4.5 trillion. This totals 500 aircraft and $500 billion more than the previous estimate by the company, issued last year.
The United States continues to be a principal player in this world marketplace, which both drives and symbolizes modern globalization. China's state-owned COMAC (Commercial Aircraft Corp. of China Ltd.) is another aircraft-manufacturing competitor, for example, but so far still on a much smaller scale.
American commercial advantages have proven remarkably durable; transportation has always been a national priority. Rivers and canals, railroads and highways and finally air transport have received sustained support.
During the Civil War, President Abraham Lincoln initiated transcontinental rail construction. During World War II, a 1942 Anglo-American agreement centered air transport production in the U.S., positioning the nation for a dominant position post-war. During the height of the Cold War, President Dwight Eisenhower channeled Pentagon money to the federal highway program.
Also, the U.S. never picked a single national air carrier or production consortium, in contrast to other countries. This has facilitated effective, long-term competition.
President Jimmy Carter deserves ― and rarely receives ― credit for domestic airline deregulation. This strengthened our commercial performance at home and abroad.
Arthur I. Cyr is Clausen Distinguished Professor at Carthage College in Kenosha, Wis., and author of "After the Cold War." Email him at acyr@carthage.edu.