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THURSDAY, OCTOBER 27, 2005
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State offers $120 million in incentives

MOBILE (AP) — The state is offering incentives totaling nearly $120 million for an $600 million aircraft plant that would bring 1,150 jobs to the coast.

Nearly 90 percent of the package — more than $105 million — hinges on EADS North America Inc. and Northrop Grumman Corp. winning at least part of a contract to assemble aerial refueling tankers for the U.S. Air Force, and on hiring 1,150 workers in Mobile.

Signed late Tuesday by Gov. Bob Riley, the deal includes about $77.6 million worth of incentives to be paid by the state and about $30 million split roughly equally between Mobile County and the city of Mobile, according to a report.

Another $5 million will come from Baldwin County, with $7 million remaining to be settled between state and local governments.

The package averages out to $104,143 per job, according to state officials. At full employment, the project's annual payroll would be $62.3 million, according to estimates from the state and companies involved.

Neal Wade, director of the Alabama Development Office and the state's chief negotiator on the project, said the incentive package was designed to be "aggressive but fair, good for the companies and for the citizens of Alabama and Mobile."

EADS in June named the Brookley Field Industrial Complex as the site of a 150-worker aircraft engineering center. The company, a subsidiary of the European Aeronautic Defence and Space Co., said it planned a 1,000-worker assembly plant if it won the Air Force work.

Last month, Los Angeles-based Northrop said it would team up with EADS in the tanker competition against Chicago-based Boeing Co.

Airbus A330

Under a deal announced Monday, EADS will assemble a version of the Airbus A330 at Brookley. Northrop will modify the airframe for military use, adding computer and electronic systems to create KC-30 tankers.

EADS officials said that tax breaks and other incentives were a factor in the company's decision to locate in Mobile, but that Alabama's offer, negotiated over 10 months, "was not the highest nor the lowest" of the four finalist sites. Other contenders for the project included Charleston, S.C.; Kiln, Miss.; and Melbourne, Fla.

Alabama "presented by far the strongest total package," EADS spokesman Guy Hicks said Tuesday. "It was clear that in Mobile we could produce a refueling aircraft system that would best meet the U.S. Air Force's operational and financial requirements."

The deal compares favorably to other high-profile incentive packages offered by the state, according to Wade and others.

The EADS/Northrop package is less than half of the $253 million deal that landed Mercedes-Benz, which now employs about 4,000 people in Tuscaloosa County after a series of expansions that were funded partially by additional incentives. Honda Motor Co. and Hyundai Motor Co. also got multimillion-dollar packages to build in the state.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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