MOBILE, Ala. — Airbus says it will build its first assembly plant in the United States in Alabama.

The official announcement Monday gives the European aerospace giant its first foothold in the U.S. to compete with archrival Boeing. The plant will make passenger airplanes.

The plant is expected would cost $600 million to build and will employ 1,000 people when it reaches full production. It will be built in Mobile.

Boeing has employed hundreds of people in Alabama for years. Airbus had planned to build in Alabama previously to manufacture refueling tankers for the U.S. Air Force. But its parent company, the European Aeronautic Defense and Space Co., lost the contract to Boeing in 2011.

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The companies have had a long-running international trade dispute. Each also has been critical of subsidies received by the other.