Arizona courting Airbus - East Valley Tribune: Business

Arizona courting Airbus

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Posted: Wednesday, February 16, 2005 5:23 am | Updated: 7:14 am, Fri Oct 7, 2011.

Arizona was among 35 states sending representatives to a meeting Tuesday in Washington, D.C. with European aircraft maker Airbus, which is seeking proposals for a $600 million plant in the United States.

The European Aeronautic Defence and Space Co., parent of Airbus, wants to set up the plant to make aerial refueling tankers for the U.S. Air Force, replacing its aging fleet of KC-135 tankers built by Boeing Co.

Arizona plans to aggressively seek the project, said Joe Yuhas, deputy director of the Arizona Department of Commerce. But he added that bidding for the plant and its 1,100 jobs is likely to be fierce.

"The fact that this is a public process clearly indicates the company intends to take advantage of the competition among the states and the incentives they have to offer," he said.

If a bidding war develops, Arizona will be at a disadvantage, Yuhas said. "Many states have a toolbox of incentives they can offer, but we do not," he said. "If we do make a short list, we will be required to go to the Legislature to put together a package."

Yuhas declined to comment on what sites and incentives Arizona might offer, nor would he comment on speculation that Williams Gateway Airport in east Mesa might be offered as a site.

"We want to keep our strategy close to the vest," he said.

Arizona proposed Williams Gateway to Boeing last year as a site to build its nextgeneration 787 jetliners, but Boeing opted to build the aircraft in Everett, Wash.

Yuhas doesn’t believe the local presence of Boeing, a fierce rival of Airbus, will be a disadvantage in competing for Airbus business. In fact, the strong aviation industry in Arizona gives the state a skilled work force and infrastructure that would make it attractive to new investments, he said.

"Sometimes the best place to put a shoe store is next door to another shoe store," he said.

"It’s not just Boeing but also Honeywell, Raytheon and smaller companies that provide goods and services to the aerospace industry. All of that contributes to the having a strong foundation."

Ralph Crosby, chief executive of European Aeronautic Defence and Space Co. North America said he was pleased with the turnout of states for the Tuesday meeting, adding that a decision on the location should be made within a year.

"What’s clear to us is any tanker for the United States Air Force needs to be built in the United States," he said.

Interested states were given a March 31 deadline to submit a general plan for where the plant would be located and what advantages the site would offer, Crosby said.

European Aeronautic officials have said their site requirements include a minimum 9,000-foot runway, space for a 1.5-millionsquare-foot building, an experienced work force and access to both a deep water port and a university with a strong aerospace engineering program.

Airbus became interested in setting up an American manufacturing plant to build aerial tankers after Congress nullified a potential $23 billion deal with Boeing last year amid an ethics scandal that led to guilty pleas by two Boeing executives.

The Pentagon is expected to reopen the deal to competition later this year.

Airbus’ participation in the program is far from certain, and political tensions between the U.S. and Europe could enter the equation.

Chicago-based Boeing is expected to pursue the contract again, building the tankers in Everett, Wash. and Wichita, Kan. The company has the support of Washington lawmakers.

Sen. Patty Murray, DWash., and other Washington representatives have denounced the European company’s plan for a U.S. plant as a ‘‘slick campaign’’ to build political support.

‘‘It’s a ploy to capture American tax dollars for a French company and French jobs,’’ said Alex Glass, a spokeswoman for Murray. ‘‘We think the tankers are going to be built in the United States and be built by Boeing.’’

News reports also have speculated that Airbus would lose its chance to build the tankers if European governments resume sales of military equipment to China, a move opposed by the Bush administration.

The U.S. and Europe halted military sales to China after the Tiananmen Square crackdown in 1989, but some European governments want to lift the ban.

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