State Offers $120 Million in Incentives for Aircraft Plant

Alabama is offering incentives totaling nearly $120 million for a $600 million aircraft plant that would bring 1,150 jobs to the coast. Nearly 90% of the package, more than $105 million, hinges on EADS North America Inc. and Northrop Grumman Corp. winning at least part of a contract to assemble aerial refueling tankers for the U.S. Air Force, and on hiring 1,150 workers in Mobile. The deal includes about $77.6 million worth of incentives to be paid by the state and about $30 million split roughly equally between Mobile County and the city of Mobile. Another $5 million will come from Baldwin County, with $7 million remaining to be settled between state and local governments. At full employment, the project’s annual payroll would be $62.3 million, according to estimates from the state and companies involved.

EADS in June named the Brookley Field Industrial Complex as the site of a 150-worker aircraft engineering center. The company, a subsidiary of the European Aeronautic Defence and Space Co., said it planned a 1,000-worker assembly plant if it won the Air Force work. In September, Los Angeles-based Northrop said it would team up with EADS in the tanker competition against Chicago-based Boeing Co. Under a deal announced October 24, EADS will assemble a version of the Airbus A330 at Brookley. Northrop will modify the airframe for military use, adding computer and electronic systems to create KC-30 tankers.

EADS officials said that tax breaks and other incentives were a factor in the company’s decision to locate in Mobile, but that Alabama’s offer “was not the highest nor the lowest” of the four finalist sites. Other contenders for the project included Charleston, South Carolina; Kiln, Mississippi; and Melbourne, Florida. (AP, October 26, 2005) (HMF/11/2/05)