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North Charleston finalist for EADS plant
By Matthew French
Staff Writer
The European Aeronautic Defense and Space Co. announced earlier this month that North Charleston has been selected as one of the finalists for a new aircraft manufacturing plant that could bring more than 1,000 jobs to the Lowcountry region.
The other three finalists are Mobile, Ala., Melbourne, Fla., and Kiln, Miss. EADS, the second-largest aerospace and defense company in the world, is the parent corporation of Airbus. The company’s North American headquarters is in Arlington, Va., just outside Washington, D.C.
In a statement released by EADS North America, Ralph Crosby Jr., the company’s chairman and chief executive officer, says the four selected sites are “highly qualified candidate locations.
“After careful evaluation, four locations emerged as the sites most capable of meeting the transportation, personnel and manufacturing demands of a large military aircraft assembly,” Crosby says. “The site we ultimately select will be our partner in creating the U.S. industrial capacity necessary to produce the best, most capable aerial refueling tanker aircraft for the U.S. Air Force.”
In January, EADS announced that it was looking for a site to build its KC-330 refueling aircraft, which it hopes to sell to the Air Force. Guy Hicks, vice president of communications for the company, says the company hopes to usurp Boeing, which has supplied the Air Force with its tanker fleet for decades. Boeing ran into some difficulty last year when a proposal to lease 100 new tankers to the Air Force fell through after Congress balked at the cost and prompted allegations of back-room negotiations and concern about the age and ability of the tankers.
“We are preparing to be competitive for the U.S. tanker program,” says Guy Hicks, vice president of communications for EADS North America. “We plan to do this with a U.S. partner, and the site selection process is an adjunct to that.”
The company will open a 150-person engineering center in the city that wins the bid some time next year, regardless of word on the Air Force contract. If the company is awarded the contract, the proposed assembly plant would employ about 1,150 people.
Crosby says the company received more than 70 responses to its request for information from 32 states. In late March, Hicks said the company was anticipating between 35 and 37 states would have between one and three candidate cities return RFIs.
Now that the selection process has been whittled down to four sites, the candidate cities have about three weeks to respond with details about possible incentives the company could receive. Following receipt of the request for proposal inputs, EADS will conduct a final evaluation, which will include more site visits, and will make a final selection this summer, prior to the beginning of the fourth quarter.
EADS’ minimum criteria for cities to be considered viable for the plant included an airport with a minimum 9,000-foot-long runway; a tract of land to accommodate a total of 1.5 million square feet of production, hangar and office space; a transportation infrastructure with good access to rail and road; and a means of large volume transport to a deep-water seaport.
Charleston’s International Airport has two runways that are 9,001 feet long and 200 feet wide, meeting EADS’ minimum requirement. The two runways are capable of handling airplanes that weigh up to 775,000 lbs. The airport’s other two runways fall short, at about 7,000 feet, with 1,000 feet of overrun space.
The transportation infrastructure in the Lowcountry also meets the requirements, with fast access to interstates 26 and 95, as well as two switching railroads in Charleston County and a short line railroad east of the Cooper River. The Port Utilities Commission of Charleston and the Port Terminal Railroad provide switching services to the terminals of the South Carolina State Ports Authority, and CSX Transportation and Norfolk Southern. The East Cooper and Berkeley Railroad, owner of the short line railroad located in southern Berkeley County, serves British Petroleum and Nucor Steel, according to the state’s division of public railways.
And Charleston already has the fourth-largest container port in the country, is located on deep water and is going to expand its presence in the area when the terminal at the former Charleston Navy base becomes operational.
“We’re very pleased that North Charleston has been chosen as one of four finalists in the EADS North America project and are confident that we’ll be able to leverage the competitive advantages of our state to bring this Airbus project home to South Carolina,” says South Carolina Commerce Secretary Bob Faith. “Global Aeronautica has come on board as the Lowcountry’s aerospace anchor tenant, and Airbus would be both a terrific and a logical addition to this industry cluster.”
Global Aeronautica is the name of the joint venture between Vought Aircraft Industries and Alenia North America, which late last year selected North Charleston as its site for an aircraft manufacturing plant where the new Boeing 7E7 Dreamliner fuselage will be built.
Lawrence Stein, a spokesperson for EADS North America, says the criteria included in the RFI will remain the same and adds that the company is low looking for incentive packages.
“There are always incentives associated with a facility like this, and we’re looking for the best value package for the company,” Stein says. “We’re basically drilling down another level.”
The competition
While the Lowcountry meets each of the minimum criteria established by EADS, take a look at the competition:
Mobile, Ala.: Mobile was one of three finalists selected for the Vought-Alenia plant but dropped out of the race in August 2004 after Vought said it expected to employ 600 people, about 400 fewer than the Alabama contingent had been led to believe in earlier discussions.
Mobile possibly has one edge over the other contenders: a preexisting EADS presence.
In January, EADS North America opened an aircraft support center in the area, which was built to support the Coast Guard in transitioning the CN-235 maritime patrol aircraft into active service, as well as providing computer-based training for maintenance crews and serving as the primary spare parts depot and service center. That facility, which is about 13,000 square feet and employs about 30 people, could lead to future expansions. The company plans to offer its C-295 transportation aircraft to the Army and would likely add an 18,000-square-foot hangar facility in Mobile, should the Army select that aircraft.
In addition to EADS presence, Mobile has a major deepwater port in Mobile Bay with 27 berths and drafts of up to 40 feet, a terminal railway that has been in use for 70 years and nearby access to Interstate 10, an east-west corridor that runs from San Antonio, Texas, to Jacksonville, Fla. In addition, the Alabama Ports Authority is heavily soliciting funds from the state Legislature to build a container port, according to sources inside the shipping industry.
The regional airport, however, falls about 500 feet short of EADS requirements. The longest runways at Mobile Regional Airport are 8,521 feet long, according to the Federal Aviation Administration.
Melbourne, Fla.: Melbourne, located on Florida’s Atlantic coast, has the runway capacity EADS is requesting, with an existing runway of 10,200 feet and plans to extend it to 11,600 feet.
Melbourne is about halfway down the Atlantic coast of the Florida peninsula between Daytona and West Palm Beach. Interstate 95, the major north-south corridor for the East Coast, runs immediately adjacent the city.
Melbourne is also located between the port of Fort Pierce, 56 miles south, and Port Canaveral, 24 miles north. Port Canaveral has several berths and a 40-foot-deep draft for cargo and cruise ships. While Port Canaveral receives mostly cruise ship traffic at this time, the port has been attempting to make inroads in the container ship business. Port Fort Pierce is smaller and has made a comparably minimal dent in the Florida shipping trade. In the 2002-2003 fiscal year, the port handled about 1,310 containers of cargo. During the same period, Canaveral handled 678 containers, according to the Florida Ports Council.
In comparison, Charleston’s port handled more than 1.7 million containers in the 2004 fiscal year.
“We don’t have a lot of activity at our port,” says a St. Lucie County spokesperson. (St. Lucie County oversees Port Fort Pierce.) “It’s mainly terminal traffic for citrus and cement.”
The three major ports for the Sunshine State are Jacksonville in the north, and Everglades and Miami in the south.
Kiln, Miss.: Kiln, Miss., is located on the Mississippi coast of the Gulf of Mexico, about 20 miles east of the Louisiana border. The town is a few miles north of St. Louis Bay, which plays host to the Hancock County Port and Harbor Commission. The commission oversees the county’s Port Bienville Railroad, port authority and airport authority.
The airport hosts NASA’s John C. Stennis Space Center, the nation’s largest rocket test facility and the largest employer in the region with about 4,500 workers.
The local airport, the Stennis International Airport, which has the state’s second-longest runway at 8,500 feet, falls 500 feet short of EADS’ requirements.
In addition, the nearest port, Port Bienville, is a shallow-draft port, not a deepwater port as EADS specified. However, the town of Kiln is close enough to New Orleans, 57 miles west, or Mobile, 95 miles east, to take advantage of either deepwater port. Kiln is also located just off of Interstate 10, giving it easy access to a major east-west thoroughfare.
According to the Hancock County Port and Harbor Commission, the commission can “secure special financial incentives from the state of Mississippi to assist tenants of the Stennis International Airpark.”
EADS’ Stein says the shorter runways at Mobile and Stennis will likely not be a “deal-breaker” and says the company is looking for the best overall package of all of the elements included in its criteria, as well as the best incentives a state and city can offer.
Matthew French covers manufacturing for the Business Journal. E-mail him at mfrench@crbj.com.
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