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. Last Updated: 07/27/2016

European Defense Giant Picks Alabama

WASHINGTON -- European defense contractor EADS has picked a site in Mobile, Alabama, to build an engineering facility that may be expanded into a manufacturing facility, sources familiar with the decision said on Tuesday.

EADS will build the facility, which will initially employ about 150 people, at the Mobile Downtown Airport, said the sources, who asked not to be identified.

The company, due to unveil the site at a news conference on Wednesday, declined comment. "We cannot confirm or deny," said spokesman Lawrence Stein.

EADS has said it would expand the facility and invest up to $600 million, employing over 1,000 highly paid aircraft engineers, if it wins a large enough share in a pending competition for new U.S. Air Force refueling tankers.

The Alabama site, which boasts a deepwater seaport, beat out sites in Florida, Mississippi and South Carolina. The losing states have already been notified, one source said.

Matt Rhodes, spokesman for Representative Jo Bonner, the Alabama Republican who represents Mobile, said the state delegation had not been formally notified of the decision.

EADS already has a service center in Mobile for its CASA CN-235 maritime patrol aircraft, which employs 30 people.

Chicago-based Boeing, EADS's rival for a tanker deal, has an aerospace site in Decatur, Alabama.

"The benefits of having EADS in Mobile would be incalculable," the Mobile Register said in an editorial last month. A spokesman for Senator Trent Lott, a Mississippi Republican, said that the selection of a site in Alabama also had the potential to create jobs for commuters from Lott's home state. Senator Thad Cochran agreed, saying, "If it couldn't be in Mississippi, this is the next best place."

Several high-ranking Alabama officials flew to the Paris Air Show last week and hosted a dinner for EADS.

A spokesman for Senator Jeff Sessions, an Alabama Republican and Senate Armed Services Committee member, declined comment. Senator Richard Shelby, the other Alabama senator and a member of the Senate Appropriations Committee, had no immediate comment.

Sessions is expected to be part of the conference committee that works out the final language of the 2006 defense spending bill. The U.S. House of Representatives version of the bill includes language that aims to keep EADS from bidding on the Air Force contract, which could be worth well over $20 billion. The Senate version has no similar provision.

EADS is also continuing discussions with Northrop Grumman to form a team to compete against Boeing in the tanker market with an aircraft based on the Airbus 330. The two companies, which work together on other big weapons projects, including the Eurohawk unmanned reconnaissance plane, could make an announcement within two weeks, the source said.

The Air Force expects to kick off a new tanker competition in fiscal year 2006, which begins Oct. 1, after a comprehensive review of alternatives by the Rand Corp., a nonprofit research company.

The U.S. Congress last year killed a proposed $23.5 billion Air Force deal to lease and buy an initial 100 converted Boeing 767s as refueling tankers after Darleen Druyun, the Air Force's former No. 2 weapons buyer, confessed to steering billions of dollars of contracts to Boeing before taking a $250,000 per year job with the company.