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Wed, Mar 30, 2005

Arizona: One State Bidding Hard For Airbus's Tanker Plant

But How Realistic Is It?

As Airbus and Boeing continue to bicker over government subsidies in their commercial businesses -- a fight that could well end up in a World Trade Organization court -- the two companies continue to fight for the USAF contract to build the next aerial refueling tanker. To that end, Airbus is trying to woo the US government by promising to build the plane in this country rather than in Europe.

Arizona wants a piece of that action.

The state is one of several vying for the $600 million plant, which will employ up to 1,100 people right off the bat. Arizona Department of Commerce spokeswoman Jami McFerran won't say which sites the state is offering to Airbus, but one official in Mesa, near Phoenix, said Williams Gateway Airport is certainly high on the list. Already, the airport has set aside a plot of land for the Airbus facility.

It's much the same site as Mesa offered up to Boeing when the Chicago-based company was shopping for a place to conduct final assembly on the 787 Dreamliner. Boeing decided to go with facilities in Everett, WA.

In February, after Airbus put out its request for proposals, 35 states responded. The European manufacturer specified an airport with a 9,000-foot runway, enough room to build a 1.5 million square-foot plant and an experienced workforce. Airbus also wants a deep water port -- the one thing Arizona doesn't have. That could hurt.

Embry-Riddle Professor Darryl Jenkins told the East Valley Tribune in Arizona that Gulf Coast states -- Florida, Alabama and Mississippi -- would seem to hold the advantage in the Airbus competition. "All decisions are political, and you have (Sen.) John McCain, who is an effective campaigner," he said of Arizona’s bid. "But everything else is a negative."

McCain led the fight against Boeing's $23 billion tanker deal with the USAF, after he discovered evidence that the bid was not only too fat, but rigged in Boeing's favor. Former Boeing CFO Michael Sears and the woman with whom he negotiated the deal, Darleen Druyun, are both serving prison time in the wake of the scandal. The contract is in the process of being rebid.

Remembering that the parts for an Airbus tanker would likely have to be shipped from Europe, Jenkins said West Coast contenders might also be at a disadvantage, given the price of shipping materials through the Panama Canal.

Airbus's willingness to play by the rules introduced by Boeing -- announce you're building a plant, then stage a competition to see which state or local government offers the best incentives -- has raised the hackles of the entire Washington state Congressional delegation. Many of them believe the competition to build a plant in the US is simply a slight-of-hand trick aimed at using American tax dollars to fund jobs in the European Union.

Stay tuned...

FMI: www.airbus.com, www.commerce.state.az.us

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