The first KC-30 air refueling tanker made by Northrop Grumman Corp. and Airbus will begin final assembly this week, the Los Angeles defense contractor said Monday.

Final assembly will take place in Airbus' Toulouse, France facility, but the two companies will shift that process to a Mobile, Ala. plant if they win a potentially $100 billion contract for the plane from the U.S. Air Force.

The partnership has so far landed the last three tanker contracts signed by nations seeking to replace aging tanker fleets. Australia, the United Kingdom and the United Arab Emirates have all signed agreements in the past year to buy the $200-million tanker.

Northrop said that if it wins the contract, the KC-30 program will create or support more than 25,000 jobs in the U.S. Airbus is a unit of the European Aeronautics Defence and Space Co.

Shares in Northrop were down 39 cents to $77.01 in afternoon trading Monday on the New York Stock Exchange.

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