Blanco: La. lost steel mill but proved itself to the world

German steelmaker ThyssenKrupp AG complimented Louisiana as a place to do business, but cited the state’s high utility costs in picking Alabama instead as the home of a new plant worth thousands of jobs.

Gov. Kathleen Blanco said she was disappointed by Friday’s announcement, but stressed that Louisiana’s yearlong, highly publicized courtship of ThyssenKrupp had advertised Louisiana to the world as a business-friendly state. She said she was encouraged that Louisiana was a finalist in the steel mill sweepstakes n beating out 18 other states n despite a lagging hurricane recovery and decades-old reputation for public corruption.

“I believe that the world fully understands now that the old way of doing business in Louisiana is gone forever. It’s a new day,” Blanco said. “We work and compete on top of the table, not under the table. We can and we will continue to compete at the highest levels.”

Blanco said at least five other companies are considering building a plant on the St. James Parish site, along the Mississippi River between Baton Rouge and New Orleans, that the German firm rejected.

ThyssenKrupp picked a site near Mobile, Ala., for the $3.7 billion plant, to open in 2010 with 2,700 employees, plus another 38,000 related jobs involving suppliers, transport and entertainment, according to the company.

The company revealed little about why it preferred Alabama. The company issued a statement saying “decisive factors included logistical considerations of the company’s supply chain from Brazil to our projected customers; operating costs such as electricity and labor; and site-specific expenditures.”

The company gave few details and it was unclear why Louisiana’s labor costs might have compared unfavorably with Alabama’s.

Jim Richardson, an LSU economics professor, said it’s nearly impossible to determine why ThyssenKrupp rejected Louisiana, because the company “has no reason to be specific” about its reasons.

“It’s difficult for us to know from the outside. I think on the inside, in the governor’s office, they certainly know why,” Richardson said.

Loren Scott, a Baton Rouge-based economist who prepared a report on the proposal for the state, said the most likely factor was high utility bills in Louisiana, where electricity is generated by natural gas, compared to cheaper, coal-produced electricity in Alabama.

“The price of natural gas has shot up and coal hasn’t. We just got unlucky,” Scott said.

Blanco said electricity costs and the effects of hurricanes Katrina and Rita might have contributed to the decision. She said ThyssenKrupp officials offered few specifics.

Dan Juneau, head of Louisiana Association of Business and Industry, a pro-business group, said the Blanco administration should perform an assessment n “an autopsy,” he called it n of the entire negotiation process with ThyssenKrupp, to assess its performance.

“Find out exactly where we were strong, and where we were weak, and try to shore up the areas where we were weak,” Juneau said.

Juneau, whose group often clashes with the Blanco administration, was complimentary toward Blanco and Mike Olivier, the governor’s economic development chief, who led the effort to lure ThyssenKrupp to Louisiana.

“I don’t know that we’ve ever come this close to getting a major industrial plant. I think there was some professionalism involved in getting this together,” Juneau said.

Both states offered financial incentives worth hundreds of millions of dollars; neither state has made public the details of those offers.

Bob Soulliere, president and CEO of ThyssenKrupp Steel and Stainless USA, said Louisiana “made an excellent proposal and demonstrated many important and valuable attributes for business development.”

Scott, the Baton Rouge economist, said Alabama also benefited from cooperation from Mississippi and Florida n whose officials also pressured ThyssenKrupp to pick Alabama.

“They were able to pull in those delegations to help them out,” he said.

Scott said Louisiana has had some recent success in attracting new jobs to the state.

“It’s really depressing when you miss something this big,” he said, “but it’s not like we’re striking out left and right.”

State Sen. Tom Schedler, R-Mandeville, who accompanied Blanco on a trip to Germany to court the company, said the mill “would have been the biggest thing since the Superdome.”

“If there was ever a state that needed a positive announcement, it was Louisiana,” he added.

Associated Press writers Matt Moore in Frankfurt, Germany, and Michael Kunzelman in New Orleans contributed to this story.