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Airbus' Plant Relocation

This week, Airbus announced it was building a new plant in Alabama. Can you assist me in answering the following questions based on information in conjunction with Foreign Direct Investment. Think about the implications and strategy that Airbus has taken in moving a large plant to the U.S. given that Airbus' major competitor in the U.S. is the manufacturer, Boeing.

1. Why did Airbus pursue a physical plant in the U.S.?
2. What are the benefits and costs to Airbus' home country?
3. What are the benefits and costs to the U.S.?

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1. Why did Airbus pursue a physical plant in the U.S.?

Airbus, which is a French airplane manufacturer, as recently announced plans to open a new manufacturing facility in Mobile, Alabama, U.S. Although this can be considered a very risky move given that Boeing, its primary rival, is based in the U.S., there are a number of benefits that had probably convinced Airbus executives to establish themselves in the U.S. One of those benefits is accessibility to one of the biggest markets in the world for airplane purchases. Being in the U.S., Airbus is able to better compete with Boeing for U.S. customers. This is achieved through better visibility. Furthermore, given the weak U.S. Dollar compared ...

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The solution discusses an airbus' plant relocation.