MOBILE, Ala.—News that Mobile would not be welcoming a $35 billion tanker project expected to create as many as 5,000 jobs across the area fell hard on the crowd assembled at the Arthur R. Outlaw Convention Center late Thursday afternoon.

The jubilation of several hundred supporters, who only moments earlier were chatting loudly amongst themselves about the implications for the entire Gulf Coast should the U.S. Air Force award the European Aeronautic Defence and Space Co. the bid for replacing its KC-135 aerial refueling tankers, fell silent when Pentagon officials delivered their decision shortly after 4 p.m.

Chicago-based Boeing Co., and longtime EADS rival, won the bid ending a contentious, decade-long campaign for the project.

The tankers would have been produced at a $600 million EADS facility to be constructed at Brookley Aeorplex.

Rep. Randy Davis said the decision deals a heavy blow to plans for creating an aerospace corridor stretching from Louisiana to northwest Florida, but the loss of potential jobs hurts more.

“The multiplier effect would be phenomenal,” Davis said, pointing to the impact Austal USA's recent expansion plans are already creating across Mobile and Baldwin counties.

“We're already seeing the potential for upwards of 4,000 jobs in second- and third-tier suppliers, and that's what (was) at stake here,” Davis said.

 Mobile Mayor Sam Jones said he was “disappointed but not discouraged” but several members of Team Mobile, the various political and business leaders charged with recruiting the project, told the then-somber crowd that the process has created several positives for the region.

The area’s story has been told, and companies such as Austal and ThyssenKrupp have paid attention, investing heavily in the area, they said, taking turns at the microphone while Pentagon officials spoke from two muted screens behind the podium.

And as one team member pointed out, the very participation of EADS made the process more competitive and created better value for taxpayers.