Economic Development Blog

State and local officials came together in Dothan, Alabama to make an announcement about Commercial Jet’s $12 million investment to open a facility at Dothan Regional Airport.

Commercial Jet (photo – commercialjet.com)

Commercial Jet will be taking over the old Pemco facility at the airport, and will create hundreds of new jobs.

With this new 400,000-square-foot facility, the Miami, Florida-based company will be able to triple its capacity to provide aircraft repair and maintenance (MRO) services, along with freighter conversions.

John Schildroth, vice president and general manager for the Dothan facility, said they were already receiving a steady flow of new orders to be undertaken at the new facility, and expected to begin operations as early as May.

They will be hiring hundreds of trained aircraft maintenance technicians over the next few years.

This particular project must seem like an especially sweet win for Dothan, which had been on the ropes after Pemco declared bankruptcy and shut down their aircraft refurbishment facility which had been operational at the airport for 50 years.

To make matters worse, the FAA decided to shut down the Dothan control tower as part of the austerity measures triggered by the sequestration.

State and local officials had started talking to Commercial Jet immediately after Pemco shut down the facility and laid off 230 employees. Commercial Jet has been provided with an incentive package worth millions of dollars, which includes renovation of the facility to make it more suitable for Commercial Jet.

The Dothan Houston County Airport Authority is handling the construction, which will be completed in stages until Oct.

AL Governor Robert Bentley, who had come down to Dothan for the announcement, said the state was proud to have played a key role in creating hundreds of new jobs for the city and the Wiregrass area.

This announcement was originally scheduled to be announced a month or so before, but was delayed because Commercial Jet was worried about the impact of the FAA’s closure of the control tower.

As it turns out, the bad timing may actually have been a blessing in disguise. With Commercial Jet’s decision hanging in the balance, Dothan decided to take over the control tower after the FAA turns out the lights on May 5, 2013.

Dothan will now have to find a private contractor to operate the control tower, which is easier said than done with $300,000 to $400,000 in annual labor costs.

But if they succeed, it will be an impressive feat and a triple win for the city and Alabama – landing the Commercial Jet project, replacing the lost Pemco jobs, and keeping the control tower open with the help of the rent and new revenues generated by the new facility.

Alabama Governor Robert Bentley is calling on the state legislature to approve the Alabama Commercial Aviation Business Improvement Act of 2013.

Gov. Robert Bentley (photo – Alabama Governor’s Office)

The law is aimed at provide a safe legal environment for the new Airbus plant in Mobile, AL and the expected network of suppliers who will be setting up operations near the Airbus plant.

“This bill will have a significant economic impact on Alabama,” Governor Bentley said. “We already expect Airbus to provide 1,000 jobs for Alabamians, and Airbus suppliers will bring thousands more. We want those jobs in Alabama, not in a neighboring state.”

The bill applies to a small category of lawsuits which involve manufacturers of commercial aircraft with 100 seats or more. It will protect the manufacturer from out-of-state and foreign plaintiffs who may seek to file suit in Alabama simply because the manufacturer located its plant here.

“Without this legislation, Airbus suppliers could very easily decide to locate in nearby Florida or Mississippi – states that have already implemented bills similar to the one being introduced in Alabama,” added Governor Bentley. “We have worked hard to create a positive business climate here in Alabama, and this legislation is needed to help us build on our progress and attract even more jobs.”

The Alabama Commercial Aviation Business Improvement Act provides that the manufacturer would be liable for causes of action occurring no more than 10 years after delivery of the aircraft. If the cause of action occurs at the 10-year deadline, the plaintiff still has two years to bring the action.

The Alabama Commercial Aviation Business Improvement Act (Senate Bill 238 & House Bill 330) is sponsored by Senator Cam Ward, Senator Vivian Figures and Representative Bill Poole.

“Just as recruiting Mercedes-Benz to Alabama in the 1990s helped usher in a new era of economic development in the automotive industry, the recruitment of Airbus is poised to do the same for the aerospace industry,” Representative Poole said. “We need this legislation to help attract the Tier 1 and Tier 2 suppliers that will bring additional jobs for Alabama citizens.”

The Alabama Department of Commerce estimates that the Airbus plant will have a $409 million impact on the state’s economy. The Airbus plant will directly employ approximately 1,000 Alabamians.

In addition, the construction phase of building the Airbus facility in Mobile is expected to create more than 3,000 construction-related jobs over a three-year period. The Department of Commerce estimates another 3,700 Alabamians could be employed by Airbus suppliers locating in the state.

Birmingham, Alabama-based Regions Bank (NYSE:RF) announced that it has created a $1 billion loan pool to provide economic development capital and spur business growth in the state of Alabama.

Alabama economic development (photo – alabama.gov)

The Regions Economic Development Loan Pool was announced by Alabama Governor Robert Bentley and Regions Financial Corp. president and CEO Grayson Hall.

“Economic development is truly a partnership. It’s a partnership between state and local developers who work every day recruiting companies,” said Governor Robert Bentley. “I’m excited that Regions Financial is a partner in economic development. This loan pool will help us build on our job creation efforts. And most importantly, it will help put more people back to work.”

The $1 billion Regions Economic Development Loan Pool is earmarked for assisting companies that are growing or expanding in Alabama in 2013.

Regions Bank will partner with the Alabama Commerce Department and directly with the businesses community to identify prospective projects for financing.

“As Alabama’s largest bank, we are committed to helping other local companies thrive and succeed,” said Grayson Hall. “We are fortunate to have robust state and local incentives geared toward economic development, and this loan pool will serve as an additional resource in growing our state’s economy and creating jobs. Access to capital is critical for business development, and Regions is committed to making that capital available.”

The event was held at the Integrated Medical Systems International, Inc. (IMS) facility. IMS, a surgical device management and clinical consulting company headquartered in Birmingham, received a $7 million loan from Regions to renovate a 55,000-square-foot building adjacent to the company’s current property.

IMS has a strategy to double its 2012 revenues of $117 million by 2017. The new operations facility will provide part of the infrastructure necessary to generate this growth. In addition, the City of Birmingham has committed economic development incentives to create the newly designated Sloss Business District, a designation that will improve the walkability and visual appeal of the area surrounding IMS and neighboring businesses.

By establishing the Regions Economic Development Loan Pool, Regions Bank intends to identify other companies like IMS seeking to grow or expand in Alabama and provide both the expertise and financing to support that growth.

Companies in Alabama interested in learning more about the Regions Economic Development Loan Pool or applying for financing can contact a Regions banker or visit a local branch.

Blagnac, France-based Safran Engineering Services announced that it would be opening a branch office in Mobile, Alabama to facilitate engineering support services for the new Airbus manufacturing plant.

Photo – Safran Engineering Services

The new $2 million Safran engineering unit at the Brookley Aeroplex will create about 50 highly-skilled engineering support services jobs with an average annual wage of $70,000.

Safran Engineering Services is a subsidiary of Labinal, which is itself part of the French aerospace giant Safran Group. Labinal’s expertise lies in electrical wiring systems for the aerospace and defense industries.

“This announcement is the latest example of how state and local leaders work together to get positive results,” said Alabama Governor Robert Bentley. “I want to welcome Labinal and Safran Engineering Services as our newest corporate citizen, and I want to thank everyone who worked together to make this announcement possible.”

Blagnac is the Toulouse suburb in France where Airbus has its headquarters and a cluster of suppliers to support its main manufacturing unit. Safran is the first Airbus supplier from France to follow Airbus from Toulouse to the United States after the Airbus announcement of the Mobile plant in June 2012.

“Alabama is poised for tremendous growth in the aerospace sector,” added Gov. Bentley. “Labinal joining us in Alabama shows how we are building on the state’s momentum in the aerospace industry. I am confident this is the first of many announcements of new jobs from companies that will support Airbus.”

Earlier this year, Gov. Bentley and members of an Alabama delegation met with Labinal officials during a visit to the Farnborough International Airshow in England.

To secure the project, Labinal was provided with an incentives package of $106,000. This includes $12,000 from the state, $70,000 from the City of Mobile, and the remaining $24,000 from Mobile County. Workforce training costs are not included in this package.

“Labinal is very excited to be the first supplier to join the Airbus Engineering team in Mobile, Alabama,” said Karen Bomba, CEO of Labinal. “This new office reflects Labinal and Safran Engineering Services’ commitment to support our customers locally and expand our relationship with Airbus. We look forward to being in Alabama and being part of the Mobile community.”

When one of the world’s two largest aircraft manufacturers lands in your backyard, the economic impact is going to be explosive. Airbus Americas had announced back in July 2012 that they had selected Mobile, Alabama for their first $600 million U.S.-based aircraft assembly line operations.

Airbus in Mobile, Alabama (Photo – Airbus.com)

Airbus Americas chairman Allan McArtor has now provided more details about their plans. McArtor said Airbus is taking the long view, looking at Mobile as their industrial home and planning for growth over the next 10-30 years.

He described the halo effect of the plant on the economy not just in Mobile or Alabama or the Gulf Coast, but in 45 states where Airbus suppliers supported some 250,000 jobs fueled by $12 billion in purchase contracts with Airbus last year.

Airbus currently has a global backlog of more than 4,400 aircraft, with a bullish forecast for growing future demand. They plan to double their annual $12 billion spending with U.S. manufacturers in the coming years.

McArtor said in a chat with al.com editorial board that the Mobile plant’s supply chain is likely to be spread from the Florida Panhandle and all the way north to Tennessee, with workers coming in from as far as Ohio.

He stressed on building up the aerospace supply chain rather than just contracting with existing suppliers. Airbus, said McArtor, wants to qualify, train and assist suppliers with certification to become aerospace suppliers.

The site location in Alabama with its massive automotive manufacturing base is ideal for getting automotive suppliers involved in the aerospace sector, since both industries have a lot of similarities.

Airbus is also planning on holding a series of supplier conferences along the Gulf Coast, similar to events that are already being held in Ohio and Southern California. Last month on Oct 19, 2012, more than 100 local manufacturers attended an educational summit at the Los Angeles Area Chamber of Commerce.

Airbus presented suppliers with an overview of its plans for growth, including sales projections, manufacturing needs, procurement strategy and details about what it takes to join the Airbus supply chain. Current suppliers shared their experiences on working with Airbus.

“By seeking new partnerships with businesses here, Airbus can help us grow the aerospace industry and ensure that it remains the strong economic engine that it is today,” said Los Angeles Mayor Antonio Villaraigosa.

“This effort by Airbus to increase partnerships with local manufacturers is a win for local manufacturers, a win for job seekers and a win for the aerospace industry,” said Gary L. Toebben, Los Angeles Chamber of Commerce President and CEO.

Back in Mobile, Airbus is in the initial stages of its hiring process for the $600 million plant, which is looking at 3,600 construction jobs and 1,000 permanent jobs afterwards for the assembly line, which should be operational by 2015 and churning out single-aisle planes in the A320 aircraft family by 2016. By 2018, they should be able to produce 40-50 planes per year.

“The time is right for Airbus to expand in America,” said Fabrice Brégier, Airbus president and CEO. “The U.S. is the largest single-aisle aircraft market in the world – with a projected need for 4,600 aircraft over the next 20 years – and this assembly line brings us closer to our customers.”

The Mobile, Alabama assembly line joins other successful and growing Airbus final aircraft assembly lines in Hamburg, Germany; Toulouse, France; and Tianjin, China.

Toulouse, France-based Airbus SAS, an EADS company, has sold more than 11,500 aircraft to more than 470 customers and operators worldwide. The company generated revenues last year of $42.07 billion for a net income of $2.03 billion. Airbus has 63,000 employees across 16 sites in Europe and four subsidiaries in the U.S., China, India and Japan.

Troy University announced the launch of the Southeast Community Development Institute (CDI) at its Montgomery Campus office in Alabama.

Wiley Blankenship, Director, Troy CIBED (Photo – troy.edu)

“The CDI gives Troy University the opportunity to demonstrate our commitment to applied economic and community development,” said Wiley Blankenship, director for the Troy Center for International Business and Economic Development (CIBED).

The new institute, housed under CIBED, will be one of only five locations in the United States offering the Professional Community and Economic Developer (PCED) certification.

CIBED assistant director Courtney Taylor will head up the CDI. The other four locations are in Houston, Texas; Conway, Arkansas; Moline, Illinois; and Boise, Idaho.

“On behalf of the CDC, I welcome Troy University into the program and know that they will be a truly outstanding campus,” said Skip Smart, Director of Community Competitiveness for Louisiana Economic Development (LED), who serves as chairman of the Community Development Council, the CDI’s governing body.

Troy Montgomery apparently impressed the university’s site selection committee because of the large number of local economic development experts available in the city, and the fact that there are numerous projects that are going on in the city.

Blankenship said it would be helpful if these city planners and economic development professionals came in and talked about what they were doing. It would allow the university to offer case studies for students to learn the practical aspects of community development.

The CDI will offer the three “years” of study that seeks to advance the standards of competence for community development professionals. It will actually be three one-week sessions each year that cover various aspects of community and economic development and that lead to the professional certification.

The first class is scheduled for April 2013, and the CDI will primarily serve the states of Alabama, Georgia, South Carolina and Florida. About 40-60 students are expected to sign up for the first batch.