Alabama industry taking off with or without tanker contract

June 27, 2008

Gregg Ferrell, director of business development for Tallassee's GKN Aerospace Services Alabama, said aerospace has become one of the state's largest economic sectors, accounting for more than 140,000 direct and indirect jobs. He said there are more than 300 aerospace companies in Alabama, three times the number of 20 years ago.

Ferrell told members of the Economic Development Association of Alabama at an annual conference that GKN has made it a rule to try to balance its Alabama business. Half of that work has gone toward making parts for civilian aircraft, the other half for military customers, because the segments often run in opposing cycles.

But for the first time in the last 25 years, both segments are seeing growth - and that's good for the industry in Alabama.

He said Alabama ranks 11th among the states in Department of Defense prime contracts, with most of those dollars going to aerospace projects. Add to that the fact that NASA spends 16 percent of its annual budget in Huntsville, and the economic impact is substantial.

Jeff Thompson of the University of Alabama at Huntsville's Center for Management and Economic Research said surveys show that 98 percent of the state's aerospace companies expect to add employees over the next few years. Most anticipate boosts in production and possible expansions.

Thompson said because of the specific skills, certifications and other requirements needed among aerospace workers, the state is already struggling to fill jobs. That is going to get even more difficult as more aerospace companies arrive or expand.

All of this is happening without Northrop Grumman Corp. and EADS building a refueling tanker for the U.S. Air Force under a $35 million contract that is being disputed by rival Boeing Co.

Northrop and EADS plan to build an assembly plant for the tanker in Mobile if they secure the contract.

Paul Cocker, general manger of GKN's Tallassee plant, said he expects Northrop/EADS will get the contract and kick in the afterburners on an already high-flying industry.

Cocker said he expects the Northrop/EADS team to begin making the tanker in Mobile in 2010 and a civilian freighter based on the same jetliner in 2012.

Freighter talk:

A confident statement from the Alabama Community College System chancellor is all it took to give flight to speculation on an Airbus project in Mobile.

Chancellor Bradley Byrne told EDAA members on Monday that Mobile will produce airplanes even if the Northrop/EADS team fails in its bid to retain the tanker contract with the Air Force. The European Aeronautic Defence and Space Co. is parent company of Airbus.

Byrne didn't stick around after a Monday speech to explain whether his statement merely expressed optimism or whether the man in charge of the state's work force training programs knew something others didn't.

For the rest of the day, economic developers who often warn others against speculation were themselves hypothesizing about Byrne's words.

Most seem to think there is a possibility EADS may move forward with its plans to produce an Airbus commercial freighter that, like the tanker, would be based on the Airbus A330 twin-engine jetliner.

In January, EADS announced plans to build the plane in Mobile along with the Air Force tanker, saying at the time the move would make production more flexible and efficient and would generate an additional 300 jobs on top of the 1,500 for the tanker project.

Because of EADS' announcement, the belief was the freighter project would come only if the tanker is made in Mobile.

Now many in the economic development community are wondering if the freighter could end up flying solo.

Michael Tomberlin
The Birmingham News
mtomberlin@bhamnews.com
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