An Incentive Package With a Twist: $40 Million to Airbus Requires Training for Mobile Residents

Wendell Powell grew up in Mobile, and once rode his bicycle from his home to the sprawling Airbus operations south of the city’s downtown.

“Never knew I would work here,” Powell said on Wednesday during a celebration hosted by Airbus commemorating the company’s newest construction project – a second final assembly line (FAL) for its popular A320-series of commercial aircraft. The project is expected to be completed by mid-2025.

Powell, an Airbus employee within the A220 manufacturing plant, is the exact kind of worker the latest incentive package for Airbus aims to attract.

A total of $20 million was approved by Mobile County and City officials this summer on cash incentives to support the Airbus manufacturing project. That money is in addition to the $20 million the state is also supporting in cash incentives.

The $40 million in combined tax incentives comes after $25.8 million in combined state, county and local incentives were spent on the A220 manufacturing plant that opened in 2020. In 2012, state and local taxpayers invested $158.5 million in incentives to land the first Airbus FAL in Mobile.

“That’s the game we play,” said State Senator Chris Elliott, R-Josephine. “When we talk about economic development, incentives are a part of that. And while we wished (companies) would come in organically, that’s not how it works. It’s not how it works in other parts of the country. Just like you can’t use your hands playing soccer, this is the game, and these are the rules we play by.”

Mobile hook

But the recent round of local incentives have a hook previously unseen in other packages with the commercial aviation giant: At least $5 million coming from both the county and city will go toward workforce development aimed at incentivizing Airbus to hire Mobile County residents.

That incentive comes at a time when Baldwin County, among Alabama’s fastest growing counties, has far outpaced Mobile County in growth over the past decade or so.

“It’s always been important to me when dealing with economic incentives to an industry that since your taxpayers are paying for that out of their tax dollars, that you make sure you get something out of it,” said Mobile County Commissioner Randall Dueitt, who led efforts with the Mobile Chamber to negotiate an incentive plan requiring Airbus invest $5 million toward apprenticeships and/or training programs to benefit Mobile-based students or adults with little to no formal skills or training.

The incentive packages are for the next 10 years and will cost the county and city $1 million every year for the next decade. There are claw back provisions focused on maintaining an employment count of 2,100 by the end of 2029. Minimum average hourly wages for the new jobs created at the new plant are to be $31.25 per hour.

“I’m a cheerleader for Mobile,” Dueitt said. “I don’t hate Baldwin County. I don’t hate Mississippi. But I ran for office in Mobile County. When I look at incentivizing a company with the taxpayers money out of Mobile County, I want to make sure Mobile County residents have an advantage for those jobs. That’s just very important to me toward making sure we do everything we can to make sure that happens.”

Dueitt said he is hopeful that of the 1,000 new jobs at the new FAL, he would like to see 70 percent of the employees relocating to Mobile County.

According to Britton Bonner, an attorney with Adams and Reese – which helped craft the original agreements this summer – about 60% of Airbus employees already reside in Mobile County. Another 30% live in Baldwin County, and 10% in neighboring counties.

Baldwin’s role

Baldwin County, itself, has provided incentives to the company, though it’s not investing directly to the latest construction FAL.

Lee Lawson, president and CEO with the Baldwin County Economic Development Alliance, said the county is paying off a five-year investment toward workforce initiatives offered primarily to high school students and teachers through the Flight Works Alabama program that his housed in a 18,000-square-foot aviation center near the Airbus plant at Brookley.

“Airbus being here in Mobile does not mean it doesn’t help the surrounding communities,” said Baldwin County Commissioner Charles “Skip” Gruber. “We have to work together to continue providing employment for our citizens of this great state.”

Lawson said the Mobile incentive packages, focusing on training for Mobile County residents only, “is a very microscopic way of looking at an incentive package.”

“I think some of the folks in Mobile have been very outspoken on how to structure that and it’s up to them,” Lawson said.

He said incentive packages Baldwin County has adopted in recent years, including over $123 million in local incentives to land a massive $2.5 billion Novelis steel manufacturing plant under construction near Bay Minette, were done without any localized employment requirements.

“We looked at Novelis and its regional impact … will it have a large impact just like Airbus has had? Of course,” Lawson said. “Are there any Mobile dollars in that incentive package? No. I think that this is on a case-by-case basis.”

Lawson said the financial support for Airbus is “worth every penny we put into it and more.”

He said there are benefits Airbus has made on Mobile that are unmeasurable.

Indeed, speakers at Wednesday’s event highlighted what they said was how Mobile’s image has been bolstered by having Airbus operating its largest North American facility in the coastal Alabama city.

“You’ve changed the image of our city,” Mobile Mayor Sandy Stimpson said. “Building Airbus airplanes here just changes the perception of what goes on here in Mobile.”

Said Lawson, “there is not a dollar amount you can put from an incentive perspective where Airbus hasn’t generated a thousand times that for the community. They changed the image for Mobile. You can’t put a value on what over $1 billion in investment and thousands and thousands of jobs creates not only for this community (but for the region).”

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