Alabama Offers New Enticement To Lure Airbus

It's not unusual for states to offer up tax breaks and other incentives to lure industry. Now, Alabama is adding a new enticement for European airplane maker Airbus and its suppliers: protection from legal liability.

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Here in the U.S. it's not unusual for states to offer up tax breaks and other incentives to lure industry. Now Alabama is adding a new enticement for European airplane maker Airbus and its suppliers: protection from legal liability. It's a topic of today's bottom line in business. NPR's Debbie Elliott reports.

DEBBIE ELLIOTT, BYLINE: Airbus landed in North America with much fanfare last summer, when CEO Fabrice Bregier announced plans to put an assembly plant in Mobile, Alabama.

FABRICE BREGIER: The town is right, the talent is right and the time is right.

ELLIOTT: Not only was the town and timing right, the deal was right. Airbus had an agreement that Alabama would move to limit the firm's legal exposure. Now, the state Senate has passed what's called a Statute of Repose - a law that bars lawsuits against Airbus and its suppliers beyond 12 years from when the plane or part was sold.

STATE SENATOR CAM WARD: Because after 12 years, a plane has been modified, a plane has been worked on. It's been repaired. Things have been changed on it.

ELLIOTT: State Senator Cam Ward co-sponsored the legislation. He says it brings Alabama in-line with neighboring states and creates a more favorable business climate, in a state that once had a reputation for high jury awards.

WARD: For years we were labeled as a, quote-unquote, "tort hell." I do think that's changed drastically. But the image and perception is still out there, with both national and international community looking to do business. And I think this does help on the perception front as well.

ELLIOTT: Lawmakers tried to pass a shorter window for allowing lawsuits - 10 years. But Alabama trial lawyers lobbied to extend it to 12. Montgomery attorney Gipson Vance is a former president of the American Association for Justice.

GIPSON VANCE: Is it the best deal ever for the consumers? It's not. But it is one that more closely strikes a balance between bringing in jobs and protecting our citizens.

ELLIOTT: The lawsuit restrictions are likely to only apply in-state. But some lawyers say it's a bad precedent to start offering up legal immunity as a way to attract industry.

ANTHONY TARRICONE: It puts businesses over ordinary people, profits over safety.

ELLIOTT: Boston attorney Anthony Tarricone has sued Airbus for a plane crash in the past.

TARRICONE: These multi-national corporations should be held accountable if they design and manufacture airplanes that suffer catastrophic failures and crash, killing innocent people

ELLIOTT: In the case of large commercial airplanes the only product covered by Alabama's new law, a 12-year window to sue is not very long, says California aviation attorney Lou Franecke

LOU FRANECKE: Most commercial aircraft, which is what airbus is manufacturing, have a service life that can go up as high as 30 or 35 years. So I think a 12-year limit is extremely short.

ELLIOTT: There's also the politically loaded question of providing legal cover for a foreign firm making its first foray into the United States; home turf of aircraft maker Boeing, the nation's largest exporter.

Loren Thompson is an aerospace analyst with the Lexington Institute.

LOREN THOMPSON: In the process of trying to attract foreign aircraft plants, Alabama potentially is providing a competitive advantage to Boeing's biggest rival.

ELLIOTT: Thompson says Boeing has some legal cover in Washington State, but not the kind of protection Alabama's law offers Airbus.

THOMPSON: Because the law that exists in Washington isn't as absolute. It can be challenged and therefore there is less protection for Boeing.

ELLIOTT: Thompson says Airbus located in the south because that's where it found the most favorable regulatory environment and lower labor costs. Now, he says, the European firm can add favorable legal climate to that list.

Debbie Elliott, NPR News.

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