|
EADS execs probe Charleston area as potential plant site
By Matthew French
Staff Writer
Two weeks after the Charleston area was selected as one of four finalists for a tanker refueling aircraft manufacturing facility, the company hoping to build that aircraft for the Air Force paid a visit to the site.
“We have brought a 22-man team to the site to get a feel for the community—the education, the housing and other, more technical things,” says David Oliver, CEO of EADS North America Defense. “We’re taking a look at transportation infrastructure and how we’d get parts here. We’re not looking to see (which city) has the best approach, but rather that they can make it work.”
In early May, North Charleston was announced as one of four finalist cities, along with Melbourne, Fla., Mobile, Ala., and Kiln, Miss. Once the winner is announced, EADS will immediately build or occupy an engineering center and employ close to 200 engineers and designers. If the company wins the Air Force competition to build the tankers, it would build a manufacturing facility likely to cost more than a half billion dollars and directly employ more than 1,000 people.
“I want to make sure that everyone thinks this is a fair (site election) process,” Oliver says. “This represents a significant investment and top-level jobs. I don’t want it to appear as if we cut a deal to move into one place or another.”
Oliver says the company is not necessarily looking to eliminate any of the four cities on these trips but rather to determine what problems exist with each site, how those problems could be worked around and at what cost.
“I’d like to go back to my boss and say that all four sites will work,” he says.
Oliver says that he is familiar with the Charleston area and is impressed at the way the city has adapted and evolved during the past 40 years. He was stationed here while in the Navy in the early 1960s and was also part of the Base Realignment and Closure team that closed the Charleston Naval Base 10 years ago.
“I’m astounded at how the community got together and developed since I was here,” he says.
“And (since BRAC), Charleston has organized. Its political and community leaders came together and did a better job than any place else in the United States. I’m astounded at how Charleston was able to change its job mix and employment mix. Of all the communities I know well, that is one of Charleston’s great strengths.”
State Secretary of Commerce Bob Faith says that he is impressed with the openness with which EADS North America is conducting its site selection process. South Carolina has traditionally kept much of the courting process behind closed doors and only addressed the public when a deal was imminent.
“It’s a bit unusual for me to say anything in the midst of the process,” Faith says.
“But EADS wants to bring the communities up to speed and say how the search will proceed from here.”
Faith says South Carolina has a lot to offer a company like EADS, including a union-free working environment, a large and efficient port and educational training through Trident Technical College and the state-funded Center for Accelerated Technology Training.
John Totushek, a senior vice president with the Staubach Co., which was hired by EADS North America to oversee the site selection process, says most of the logistical questions he had about Charleston have been answered to his satisfaction.
“We had questions about transportation to and from the ports and the height of the hangars and whether that would meet the airport height restrictions (as mandated by the Federal Aviation Administration), but those have all been answered,” he says.
“We’re also looking at real estate costs and availability. Charleston obviously has a wonderful quality of life and the benefit of having the Air Force here. People leave active duty every day, and we feel we can attract engineers to this area. The question that remains is the ability to find or attract the skilled laborers, the guys with the wrenches.”
Uphill battle
EADS potentially has a strike against it, given that it is the American division of the European Aeronautic Defense and Space Co. Defense contracts, in particular, tend to favor domestic companies, and EADS North America’s primary competition, Boeing, is precisely that.
“I believe that competition is good,” Oliver says.
“If you pit two companies against each other, you’ll drive the cost down and build a better product. We have to demonstrate that competition is better for the Air Force, and I wouldn’t bring this product to them unless I think that it’s 40 percent better and that it’s less expensive.”
Currently, the American aircraft giant Boeing supplies the Air Force with its tanker fleet and has done so for decades. But the company ran into some difficulty last year when a proposal to lease 100 new tankers to the Air Force fell through when Congressional oversight balked at the cost, the allegations of back-room negotiations and concern about the age and ability of the tankers.
“When one company has a monopoly position, whatever the good intentions were at the outset, the company will inevitably get lax,” he says.
“You don’t get the technological benefits and price benefits (without competition), and there has essentially been no competition in this area for 50 years.”
What remains to be seen is what type of incentive packages the four competing states can offer EADS. After the team evaluated Charleston, Melbourne, Mobile and Kiln, it met in New Orleans to discuss the strengths and weaknesses of each.
The company plans to meet individually with the four states’ Congressional delegations in early June and hopes to make a decision by the end of the month. EADS North America will announce the site winner in July.
Matthew French covers manufacturing for the Business Journal. E-mail him at mfrench@crbj.com.
|
E-Mail This Article
Printer-Friendly Version