Airbus, the primary rival of Boeing (NYSE: BA), will open a plant in Alabama. It may have made the decision to counter American politicians’ belief that Airbus works in the interests of its European owners. In part, that means keeping manufacturing jobs in Europe. Members of Congress have attacked the company because, while Boeing employees tens of thousands of people in the United States, Airbus has nearly none.
There may be another explanation. Like Japanese car companies, Airbus may have discovered it is economical to make some parts of its planes in the U.S. Labor is usually cheap in the deep South. States are willing to provide rich subsidies, often in the form of tax breaks. Airbus might not care about perceptions at all. It may just want to increase its profits.
Douglas A. McIntyre
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