(MOBILE, Ala) - Two major companies with ties to Mobile are in merger talks. BAE Systems and EADS are in advanced talks.
EADS is the parent company of Airbus, which recently announced it plans to build an aircraft assembly plant at the Brookley Aeroplex.
The merger would create one of the largest aerospace and defense companies in the world, and the combined revenue would surge past Boeing's. The merger could also mean more jobs for the port city down the road.
"This looks like good news for Mobile. I don't see how the town can lose. It probably will gain," said Lexington Institute COO, Loren Thompson.
A merger would likely mean and opportunity for EADS to expand its defense footprint in the United States, where currently BAE is the 7th largest defense supplier.
"You can imagine scenarios in which EADS would become a more active defense player, and it would probably favor work in Mobile," said Thompson.
With EADS' company Airbus about to assemble aircraft here, analysts say a merger could better position the company for future aerospace contracts, like aerial re-fueling tankers.
"KC-X was just round one, you have the KC-Y competition that will come many years down the road. But EADS will be able to better say look at what we do for the US economy, look at what we do for US jobs, and oh by the way we're the number 5 defense contractor or what ever it will be at that point in time," said Scott Hamilton, managing director of Leeham Company.
"That's a substantial merger," said Mayor Sam Jones.
Jones says he was surprised by the merger talks but gladly welcomes them. He only sees an opportunity for growth in the city.
"When you look at Mobile, we're perfectly postured to grow with both companies because they're both already here. BAE has just announced they're looking for new employees in their yard here. Of course, Airbus is looking for new employees. So it can only be positive for our community," said Jones.
Though it sounds like a win, analysts warn it will take several years for new jobs to come to fruition, if it happens at all.
"The Iraq War is over, Afghanistan is winding down. We do have huge deficits that we have to deal with. So I think your in a down cycle of defense spending," said Hamilton.
To give you an idea of the footprint these companies already have in Mobile, currently, EADS maintains Coast Guard aircraft at the airport. And when Airbus is fully operational, the company will employ an estimated 1,000 people.
BAE Systems currently employees around 800 people at the port, primarily building and repairing commercial ships. The company plans to ramp up employment to 2,000 by the end of next year.
