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Waiting on the Winner – Mobile Alabama Tanker Contract

Mobile Alabama, close neighbor to Pensacola Florida, is in the running for a huge US Air Force contract. If you’ve been checking out the news (or my local Pensacola Real Estate Blog), you may have seen that Mobile Alabama is considered the fastest growing metropolitan area economy in the United States.

Read the article about Mobile’s economic boom

Much of this economic stimulus is coming from the steel mill described in the article. Now just imagine what the effect on the economy of Mobile would be if Northrop Grumman Corp. and EADS North America were to win the $40 billion Pentagon deal to buy new aerial refueling tankers. The Northrop team would assemble its tankers in Mobile if it gets the bid. However, if Boeing wins the contract, much of the work will go to Seattle, and various other cities.

The winner of the contract will deliver 179 planes, the first of three orders designed to replace the Air Force’s fleet of more than 530 KC-135 tankers, which average nearly 50 years in service and are wearing out fast.  Northrop and EADS project their production workers will earn an average weekly wage of almost $1,250, well above Alabama’s $813 weekly average for manufacturing work.  This contract is estimated to  create about 1,500 jobs at the Brookley Field Industrial Complex and more than 5,000 at spin-off suppliers statewide. The factory would have an annual $280 million economic impact in Alabama.

Everyone was hoping to hear news today (Feb 26) on who won the contract. The decision has already been made, but the Pentagon is keeping it a secret. Boeing is favored to win by the analysts (whoever they are), but we won’t know until it is announced.

Would the winning of a contract of that size have any impact on Pensacola real estate or our local economy? I believe there would be some positive impact, but probably not enough to pull us out of this down real estate market.

Win or lose, Mobile is still a winner. This contract bid is drawing the attention of other companies worldwide who see Mobile Alabama as a very business-friendly environment.  It is definitely drawing my attention as a great place to work and invest in real estate. I’ll post as soon as I find out who the contract winner is.

Update: February 27 – We probably will not hear anything regarding the contract award today. Read more about it here.

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