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Airbus, Indonesia Airline In ?18.4 Billion Accord

"Our ambition at the European level isn't to just continue the great EADS adventure but to also conceive of other EADS for other economic sectors with our European partners," he said. "Europe isn't just a market. ... Europe is also an industrial ambition."

The announcement comes as France is trying to convince companies that it is a viable center of manufacturing and persuade them to move or at least keep factory jobs there. The government touts its educated workforce, significant government support for research and sophisticated infrastructure.

But making anything in France is expensive â¿¿ in large part because the cost of labor, including salaries and benefits, is so high. Also, some companies fear that it's too hard to fire French workers when things get tough and are instead eyeing countries like Spain, which has recently overhauled its labor rules and can offer some of the same advantages as France.

Despite these challenges, France has nurtured some "national champions," as it calls them, of which Airbus is one. Making airplanes â¿¿ or nuclear reactors or new drugs â¿¿ takes significant investment over a long-term, and governments can often provide private sector companies a leg-up. France has a sophisticated system in place to do just that, taking direct shares in companies, investing in research in strategic sectors at state labs and using its tremendous buying power.

Lion Air is a low-cost carrier that holds about a 45 percent market share in Indonesia, a sprawling archipelago that's seeing a boom in both economic growth and air travel. Dozens of airlines have emerged in Indonesia since it deregulated its aviation industry in the 1990s, making air travel affordable for the first time for many of the country's 240 million people, and luring passengers away from ferries and trains.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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