Contrary to what we might like to tell ourselves around these parts, the Puget Sound region is not the global center of commercial aerospace production.
Yes, we have a huge cluster of a prime manufacturer and multiple tiers of suppliers. But so does Airbus in Europe. So do the Chinese with their emerging aerospace sector, which includes both Boeing and Airbus. Japan, Russia, Canada and Brazil are all players to some degree.
In the United States, Southern California has a long aerospace heritage. Boeing sent a jolt through this region when it opened a second production facility in South Carolina.
And now a new domestic aerospace center is posing a competitive threat to the Puget Sound region’s cluster in terms of jobs and economic development, and is poised to be even more of one: Alabama.
The quiet emergence of the U.S.’s newest aerospace region was a tangential aspect of last week’s announcement of a deal between Airbus and Canadian transportation-equipment manufacturer Bombardier (Sound Transit operates rail equipment made by the company) for its C Series passenger jets.
Under the deal, Airbus gets half of a limited partnership (Bombardier and the government of Quebec are the other partners) that will produce and market planes in the single-aisle market, ranging in capacity from 100 to 150 seats.
Airbus isn’t putting up money for now, but has the right to buy out its partners.
There are a lot of angles and aspects to the deal to cogitate upon, and most have been focused on the Boeing-vs.-Airbus competition. The consensus opinion is that Boeing got outplayed and outflanked, and has largely itself to blame.
Boeing has been pursuing a trade complaint against Bombardier over the price at which it sold planes in the United States as well as subsidies that company has received (that Boeing is criticizing someone else about subsidies has not escaped notice), even though it has no plane model in that segment of the market.
Airbus’ action in rescuing a financially tenuous program boxes Boeing in and will force it to make some decisions about a replacement for the 737 and whether to go chasing after the smaller-jet segment with its own tie-up, such as with Brazilian or Japanese manufacturers — or at least that’s what the conjecture suggests.
Those are all important considerations, but here’s one that’s also significant if not as attention-grabbing: Bombardier’s principal assembly line will remain in Quebec, but Airbus plans to open a second in the United States for planes to be sold to American airlines (neatly defusing many of the trade and political objections to the deal).
The location of that second line: Mobile, Alabama.
Airbus opened that $600 million, 53-acre plant in 2015 for final assembly of A319, A320 and A321aircraft. It employs hundreds of workers at that and other facilities in the area, and plans to add more.
Lest Airbus’ presence in the Deep South be dismissed as a politically motivated and expensively purchased (by the state) one-off, look farther north to Huntsville. That’s where the Jeff Bezos-backed, Kent-based space venture Blue Origin announced earlier this year it’s building a rocket-engine manufacturing plant.
That follows announcements by Aerojet Rocketdyne, which has a major facility in Redmond, that it is putting not one but two facilities in Huntsville. (Space, it should be noted, is a sector upon which a lot of economic development types are banking on for growth; so are several other states and cities around the country.)
Those investments are a big deal. So are the dozens, if not hundreds, of investments that don’t get as much attention but are crucial in building the network of subcontractors, suppliers, vendors and research institutions that feed into and off of those core producers.
The Puget Sound area has that kind of cluster, one built over decades. Despite the huge sums required, it’s not impossible to build more. The South is now a major manufacturing center for automobiles. It’s becoming one in commercial aerospace, which will mean more competition for investments by those who want to become part of it.
If this region wants to keep aerospace as a core economic driver (given the trends and tone of discussion in recent years, that’s not as settled a question as it once might have been), it needs to understand what it’s up against in the way of competition.
Most of the consternation around here to date has been over the growing competitive threats from China and, domestically, South Carolina. Now there’s a new entrant on the list.
The Airbus-Bombardier deal might represent a tie-up between European and Canadian companies, and the most obvious ramification of the combination may be in far-off Alabama, but the reverberations will be clearly felt in Frederickson, Auburn, the Kent Valley, Renton, Everett and anywhere else in Washington that still fancies itself a part of, and still relies on, the aerospace industry.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.