Airbus Planning A Factory in Alabama

A blog about business and economics.
June 28 2012 1:53 PM

Airbus Planning A Factory in Alabama

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A small LH10 Elipse moves after landing in front of four Airbus (from L to R) A300, A320, A340 and A380 lining up on the tarmac on June 17, 2009 at the 48th international Paris Air Show at Le Bourget airport prior a special Airbus 40th year anniversary event.

Photo by PIERRE VERDY/AFP/Getty Images

European aircraft manufacturer Airbus is close to opening a factory in Mobile, Alabama to make its popular narrowbody A320 planes. This is partly in order to take advantage of the fact that U.S. labor costs will be lower in Alabama than in its factories in Toulouse and Hamburg, but I suspect there's also a political economy angle here.

Right now in American politics, Boeing plays as an "American manufacturer" while Airbus is a "foreign" company. That creates a political economy built around general considerations of ideology, trade, and export-promotion. By locating production facilities in the South, Airbus can transform the situation into something closer to what currently prevails in the political economy of the automobile industry. When it comes to cars, the "American" companies are now really northern/union producers while the "foreign" companies are really southern/non-union one. Building planes in Alabama will mean that Airbus now has friends in congress.

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That matters a lot because the government is very much involved in the aviation industry.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.