Airbus Plant Headed For Alabama

[David]

AP


The parent company of European aircraft maker Airbus, seeking to better compete with Boeing for a lucrative Air Force contract to build military refueling tankers, announced Wednesday it has selected Mobile, Ala., over three other Southern sites for a $600 million factory.

The European Aeronautic Defense and Space Co. selected the Alabama site over three rival bids from Melbourne, Fla., Kiln, Miss., and North Charleston, S.C.

Ralph D. Crosby, chairman and CEO of EADS North America, said Mobile was chosen because it is "strategically located" on the Gulf of Mexico, and offers a skilled work force, airport runways and a deep-water port. Brookley Industrial Complex provides 4.5 million square feet of industrial space, and includes access to the Mobile downtown airport.

An Airbus engineering center will be built nearby and is expected to open in 2006, the company said.

The Boeing Co., based in Chicago, lost the tanker deal last year after revelations that it had hired a top Air Force acquisitions official who later admitted giving the company preferential treatment.

The deal would have allowed the Air Force to buy or lease 100 Boeing 767 planes for use as KC-330 refueling tankers, but was killed by Congress in last year's defense authorization bill. The Air Force has said it is likely to reopen the deal to competition, although no formal timeline has been set.

Initially, EADS plans an engineering center that would employ 100 to 150 people. If the company wins the tanker contract, it would then team with a U.S. defense contractor - most likely Northrop Grumman - to build the factory, which could employ as many as 1,100 people.

Alabama Sens. Richard Shelby and Jeff Sessions, Rep. Jo Bonner and Gov. Bob Riley were on hand for the announcement here.

"This victory catapults Alabama toward a new era of growth in the aerospace and defense industries," Riley said in a statement.

During a recent visit to a proposed site near Charleston International Airport, the head of the company's defense division said the contract would be a boon.

"You're bringing in a whole bunch of top-level jobs. It was our opinion we did not want it to appear as if we cut some deal," said David Oliver Jr., chief executive for EADS North American Defense.

EADS, which is based in France and Germany, had said that it planned to offer a tanker version of its Airbus A330 passenger jet for the multibillion-dollar Air Force contract to produce a new generation of aerial refueling tankers.

Boeing spokesman Dan Beck declined to comment specifically on Wednesday's announcement.

Asked about the overall tanker program, Beck said: "There is not a competition [right now]. There is no tanker replacement program, so there is nothing for us to address at this point."

The immensely public search gave EADS some much-needed positive spin at a time when the U.S. and the European Union are engaged in a trade battle over the EU's subsidies to Airbus, which the U.S. claims gives it an unfair advantage over its chief rival, Boeing.

EADS hopes to get a substantial portion of an expected $9 billion in new spending for military tanker planes, but congressional leaders are trying to tie the subsidy debate to the contract decision.

"My only guess is the openness is political," said Charles Hill, a professor at the University of Washington School of Business who closely follows the aeronautics industry.

"They are trying to send a message," he said. "Their strategy is to have quite a bit of work done in the United States. It is clear they want to be seen as a global organization, not just a European one."

EADS and subsidiaries already have facilities in Mississippi and Alabama. EADS-owned American Eurocopter LLC opened a helicopter factory in Columbus, Miss., last year, and EADS North America this year invested in a new support center for Coast Guard patrol aircraft in Mobile near the proposed site for the tanker factory.

[sn-e3]

the whole deals about airbus is B.S. sorry airbus but not on my watch arrigant asshole's

[David]

What bugs me is that they already get subsidized by Europe and you know whenever a company moves from one place to another they are cut all kinds of sweetheart deals, tax breaks etc., to end up were they do.This really puts the fire to Boeing's feet and sets Airbus up with unfair advantages. I know, who said capitalism was fair.

My second concern is also economic in nature. So they build a plant here and hire a paltry 1400 people at best while sucking $9 billion out of our economy? Outside of the ultra rich owners and very wealthy stock holders who does this benefit or make sense to? I could keep ranting for a long time but suffice it to say it just seems one industry after another is getting a boot in the hind quarters with little or no protection from the borders they reside within.

All metaphors aside, may every Airbus bid go down in flames

[David]

Here is another story along the same lines.


AP


China's third-largest oil producer made an unsolicited $18.5 billion bid Thursday for U.S. oil company Unocal Corp., marking the communist nation's most ambitious attempt yet to acquire a Western company and setting the stage for a possible showdown with U.S. politicians concerned about potential national security issues.

The purchase by state-owned CNOOC Ltd., if completed, would be the biggest yet in a multibillion-dollar wave of foreign acquisitions by Chinese firms trying to secure a place in the top ranks of the corporate world.

It comes amid a flurry of Chinese government efforts to secure foreign energy supplies for the country's booming economy.

Unocal already had agreed to be acquired by Chevron for a lower price of $16.6 billion, but said it would evaluate the CNOOC offer. Unocal said its board's earlier recommendation to shareholders to accept the Chevron offer remained in place.

Chevron offered in April to acquire El Segundo, Calif.-based Unocal in a deal that would give Unocal shareholders a choice of $65 per share in cash or Chevron stock or a mix of stock and cash.

A CNOOC takeover of Unocal would require approval from a U.S. government panel that examines the national security implications of selling American companies to foreigners, according to U.S. Energy Secretary Samuel Bodman.

It could face opposition in Washington, where even before CNOOC made its bid, two members of Congress appealed to President Bush last week to review the deal for possible security threats.

CNOOC Chairman and CEO Fu Chengyu insisted Thursday that national security wasn't an issue.

"This transaction is purely a commercial transaction," he said in a conference call with reporters. "We are confident that the U.S. government will support this project."

Fu called the bid friendly and said it would be superior for Unocal shareholders.

Elsewhere, China has forged oil and gas deals in countries ranging from Sudan to Kazakhstan to Venezuela. Beijing is competing with Tokyo for access to Russian oil from a planned Siberian pipeline.

China used to meet its own needs from domestic oil fields but became a net importer in the 1990s and now is one of the world's biggest consumers, along with the United States and Japan.

In other industries, top state-owned Chinese companies have made a string of high-profile acquisitions abroad in an effort to establish a global presence.

U.S. appliance maker Maytag says it is considering a $1.28 billion buyout offer from China's Haier Group and two U.S. private equity firms. Chinese computer maker Lenovo Group Ltd. earlier bought IBM Corp.'s PC business for $1.75 billion.

CNOOC said its deal with Unocal would more than double its production and increase reserves by nearly 80 percent.

The company also noted that both it and Unocal have a significant presence in Asia. CNOOC estimated that 85 percent of the combined reserves of both companies are located in Asia and the Caspian Sea region.

The company argued that the combination would result in a more balanced portfolio between natural gas and oil reserves, resulting in protection from price volatility in both commodities.

Chevron, based in San Ramon, California, reaffirmed its bid, saying its offer "combines compelling value, regulatory certainty and accelerated timing, providing a superior transaction for Unocal stockholders."

The Federal Trade Commission approved the Chevron-Unocal deal in June after Chevron promised not to enforce a patent on reformulated gasoline that the FTC said could raise gas prices in California.

Chevron noted that a deal with CNOOC would require extensive new regulatory approvals in the United States and elsewhere.

CNOOC Chief Financial Officer Yang Hua told Dow Jones Newswires that his company is "prepared to closely cooperate ... to get U.S. approval for this deal."

CNOOC said it plans to retain "substantially all employees, including those in the U.S," noting that Chevron, in contrast, plans layoffs.

"We believe the offer will be very good for America as we are going to protect U.S. jobs while continuously marketing (Unocal's) products in the U.S.," Yang said.