Five years ago, Louisiana’s state economic development officials tried unsuccessfully to lure a $5 billion ThyssenKrupp steel mill to locate in the state. In spite of a lucrative package of tax incentives and other inducements, the company located its plant in Alabama instead.
The plant once coveted as a grand prize in a fierce rivalry between Louisiana and Alabama is now up for sale. ThyssenKrupp officials said that high production and transportation costs, a weakening market and intense competition have made the Alabama plant sale necessary. Industry analysts have predicted that Nucor Corporation, which has plans to built a steel plant in St. James Parish, might try to buy the ThyssenKrupp plant. Nucor officials have said their plans to build a plant in St. James Parish remain unchanged.
ThyssenKrupp’s decision to sell its Alabama plant is a reminder that in commerce as in most of life, there are no sure things. Industrial projects touted as the economic saviors of a region or state don’t always meet their promise. That’s why many state-funded economic development incentive packages for big industrial projects require that companies meet certain benchmarks in generating jobs before the incentives are activated.
ThyssenKrupp’s disappointing experience with its Alabama operation doesn’t mean the Alabama plant is doomed. Perhaps another company can buy the plant and make it profitable.
But ThyssenKrupp’s move to sell its Alabama plant is a development few could have predicted five years ago. Such news reminds us that things can change quickly in a global economy. That reality doesn’t mean that economic development officials shouldn’t take risks in luring industry. However, when public resources are involved in efforts to attract industry, the public does need a clear view of what stands to be gained — and lost — in large development deals.
This kind of clear-eyed scrutiny can be difficult amid all the initial hype that typically surrounds the courtship of prospective industries. Assessing the potential of such projects becomes even more difficult when state officials refuse to disclose details about the projects in a timely manner.
We hope that state officials and the public keep these things in mind when the next industrial project is announced with breathless enthusiasm.