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Louisiana in high-stakes bid for huge steel project

After years of seeing such high-profile industrial projects as auto manufacturing plants go to other southeastern states, Louisiana has reached the finals of the competition to lure a German steelmaker planning a $3 billion plant.

Although most of the details of competing proposals between Louisiana, Alabama and Arkansas are being kept close to the vest by those involved in the negotiations, it is clear the winning state will nab an economic development project ranked among the biggest to come to the South in years.

For example, the Mississippi Nissan assembly plant, a highly sought-after project that opened three years ago, involved a $1.4 billion investment. The largest industrial project to come to Louisiana in about 20 years — the Union Tank Car Co. plant at Alexandria — cost the company $68 million to build.

As the Louisiana Legislature continued moving a package of $300 million in economic incentives for German industrial conglomerate ThyssenKrupp AG, company officials met in private Thursday with state economic development officials.

The 6.6 million-square-foot plant, which would be located along the Mississippi River in St. James Parish between Baton Rouge and New Orleans, is expected to have 3,000 jobs and create up to 40,000 construction jobs. The incentives before the Legislature would be used to prepare the site, make port improvements and build roads, docks and other infrastructure.

During her address to the current special legislative session, Blanco warned that the competition with Arkansas and Alabama would be stiff. “If we don’t fight for this, if we don’t send a message to the nation that we are in the economic game, we’re going to be out of it,” she said.

Loren Scott, professor emeritus of economics at Louisiana State University, said he had been working with the Louisiana Department of Economic Development and could not speculate on the state’s chances to land the project.

Scott said the project “is for real. To use a technical economics term, it’s a big mother.”

On Thursday, the House-passed incentive bill received approval from a Senate committee, setting up debate in the upper chamber.

“The state has put an aggressive offer on the table,” said Commissioner of Administration Jerry Luke LeBlanc, the governor’s top budget officer.

Louisiana Economic Development Secretary Mike Olivier said the governor and her staff, the economic development agency, site selection managers and some legislators were involved in Thursday’s talks. He said the ThyssenKrupp officials were impressed with the legislators’ commitment to the company and the large number of co-authors on the steel mill fund bill.

It’s unclear how Louisiana’s incentive package would stack up against any offered by Arkansas and Alabama. Both of those states are keeping their bids secret and have given few, if any hints, of what they would offer.

In August, Alabama state finance director Jim Main said his state had set aside almost $1 billion in tax-exempt rebuilding funds for Hurricane Katrina for an industrial project at Mobile. Main would not identify the company but said it could bring up to 3,000 jobs. He said the company was asking for more than $900 million in tax-free bonds from Alabama.

Arkansas Gov. Mike Huckabee confirmed in August that his state also was seeking the project. Media in Arkansas have reported that a site is being considered near Osceola, 40 miles north of Memphis, Tenn. and near the Mississippi River and Interstate 55.

“Arkansas has proven we can manufacture steel and ThyssenKrupp would be well served if they choose to locate here,” Huckabee said at the time.

Water transportation seems to be a common factor. The Louisiana and Arkansas sites would provide a quick means of moving raw material to the plant and moving out finished products. Mobile has an aggressive port on the Gulf of Mexico that competes with the Port of New Orleans for shipments to Latin America.

Although ThyssenKrupp hasn’t said why it has pointed itself toward southern states as a site, the company’s Web site says 22 percent of its sales is generated in the region of the North American Free Trade Agreement, which lifts trade barriers between the United States, Canada and Mexico. The company also has U.S. steel plants in California, Michigan, Nevada, New Jersey, Ohio and Wisconsin.

Besides steel, ThyssenKrupp manufactures automotive parts and elevators. Of the corporation’s 187,000 employees, 104,000 work outside of Germany, the company says.

On the Net:

ThyssenKrupp AG: http://www.thyssenkrupp.com/