Airbus Group NV has announced that it is set to open its jet production site in Mobile, Alabama, according to a report from Bloomberg.
The airplane maker is looking for a greater share of the U.S. market, as well as lower production costs.
Kevin Michaels, a vice president with the aerospace practice of consultant ICF International, told Bloomberg that the move brings Airbus closer to Boeing Co.
"It brings them closer to one of the world's greatest commercial markets," he said.
The Wall Street Journal also reported that Airbus' decision to build a production site in Mobile is seen as the company's highest profile move to bolster its presence in the U.S.
The airplane maker has invested $600 million in building the production site.
Allan McArtor, chairman and CEO of Airbus' U.S. unit, told The Wall Street Journal that the company is looking to make a foothold in the U.S.
"We wanted to make the U.S. one of our industrial homes," he said.
The Wall Street Journal also mentioned that Airbus initially picked Mobile to be its location for the refueling plane program.
The company moved to commercial aviation after it lost the military contract to Boeing.
The Wall Street Journal stated that Airbus chose the location because of Alabama's lower labor costs.
They also liked that the area has access to a port.
Michaels told Bloomberg that adding the fourth plant in Alabama also gives Airbus more flexibility to ratchet output up or down, while saving on land, energy and labor.
The workforce in Alabama is not unionized as the state's laws discourage organized labor.
Michaels also told Bloomberg that the production site in the U.S. could also serve as a counterweight to Airbus' European assembly line in Toulouse and Hamburg over time.
The area's unionized workforce and heavy government regulations have been weighing on the airplane makers bottom line.
Airbus said that most of the planes that will be built in Mobile will be delivered to North American customers.
Deliveries are due to start early next year, with the company planning to increase its production to four planes a month by 2018.
