August 1, 2012 / 9:28 PM / 5 years ago

Florida's Panhandle sees lift from Airbus deal

3 Min Read

(Reuters) - Florida's Panhandle expects spillover job gains from Airbus's planned $600 million airliner plant in Alabama that could ease local economic pain from looming cuts in U.S. military spending, a city mayor from the region said on Wednesday.

Pensacola Mayor Ashton Hayward said he soon expects to announce a deal with an aerospace company that will bring more than 300 jobs to his city in northwest Florida that is near or home to six U.S. military facilities.

Hayward declined to detail terms or identify the firm but said in an interview the agreement is for an expansion in Pensacola of a group now operating in nearby Mobile, Alabama, where the Airbus unit of aerospace group EADS EAD.PA last month said it would build its first U.S. factory.

"They want to expand. They want to go to Pensacola," Hayward said of the unidentified aerospace firm. "It would be a huge boom for our region, with 300 plus jobs in the city of Pensacola, which would be good paying jobs."

A city of 52,000 residents, Pensacola is the hub of an area in western Florida of about 455,000 people, according to government statistics. It had an unemployment rate of 8.4 percent in June, versus a U.S. rate of 8.2 percent and a Florida rate of 8.6 percent.

St Aerospace

Newspapers have reported that Pensacola officials have met in Mobile with executives of Singapore Technologies Aerospace, an airplane repair group that is part of ST Engineering (STEG.SI). A spokesman for ST Aerospace in Mobile was not immediately available to comment.

Hayward said his region, which relies on the U.S. military, tourism and healthcare for much of its employment, also expected to add jobs created by new suppliers to the Airbus assembly plant.

Asked about an automatic $55 billion reduction in military spending set to take effect January 1 under Washington's U.S. debt ceiling compromise, Hayward said the cuts might sting his region's economy.

"It has the opportunity to have an effect, but what we are focused on is getting that aerospace sector going," Hayward said.

Southeastern U.S. states are keen to attract new aerospace business, and are hopeful that the plan by Airbus to build its first U.S. manufacturing facility in Mobile will spur the development of an aerospace corridor along the Gulf Coast.

The region has already had success luring foreign companies especially, and has seen growth in manufacturing jobs as carmakers like Toyota, Honda, Hyundai, Volkswagen and BMW built plants.

In announcing the A320 assembly plant last month, Airbus cited the potential to create 5,000 jobs for Mobile and surrounding areas as suppliers move in.

Reporting by Michael Connor in Miami, Additional reporting by Karen Jacobs; Editing by Kenneth Barry

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