With a stale national economy as a backdrop, a decision by steelmaker Nucor Corp. to move ahead with a $3.4 billion project in Louisiana is a major score for the state.
The first phase was unveiled last week: a $750 million plant inSt. James Parish that will produce iron for steelmaking is expectedto be operating by the end of 2012, with 150 jobs.
Nucor estimates that the jobs will pay about $75,000 per year -a welcome bit of information in a state where the average personalincome in 2009 was about $35,000. If Nucor decides to go throughwith all five phases, St. James will have a complex that producesiron from ore and scrap metal all the way to finished steelproduction. Nucor says that will require about 1,250 employees.
Few such big-impact developments have come to Louisiana inrecent years.
Gov. Bobby Jindal has put a lot of his administration's stock -and his future political ambitions - in the competitive gamebetween states of nailing down business projects.
Some of Louisiana's wins have been small, though the collectivenumbers in the recession have been big.
One high-profile project got that way amid a lot of bad jokes:the Farmerville chicken processing plant that Pilgrim's Pridedecided to shut down after filing for bankruptcy reorganization.The state paid half of the $72.2 million price for California-basedFoster Farms to take over the plant - and, at last report, theplant had just over 1,000 workers.
Jokes aside, economists warned that if the plant wasn't saved,an economic tsunami would have gone through the area, puttingmerchants and chicken-farmers out of business and leaving localbanks stuck with bad loans.
Nucor moves Louisiana into another league.
Not all is wonderful, of course. Economic developers, runningout of money from a special state fund to provide businessincentives and with virtually all of the hurricane-recovery bondcapacity for business projects exhausted, have three major problemsahead.
One is the General Motors plant in Shreveport, scheduled toclose no later than mid-2010, eliminating the remaining 900 or sojobs there. The next is the NASA Michoud Assembly Facility in NewOrleans, which, if the Obama administration gets its way, will bewithout a major space mission very shortly. And the big wolf at thedoor is Northrop Grumman's plan to close its Avondale shipyard inJefferson Parish early in 2013, eventually costing 4,700 jobs.
The state already is working on filling up a space-less Michoud.Last month, it nabbed Blade Dynamics Ltd. to build advanced windturbine blades at Michoud, creating at least 600 jobs over the nextdecade. After last week's announcement of Nucor's plans, stateeconomic development head Stephen Moret said the project likelywill boost efforts to find new projects for Avondale, Michoud andthe GM plant.
Between the success of Nucor and the pending job losses is theV-Vehicle Co. autobuilding project in Monroe, which backers saywill create 1,400 jobs. That project is contingent on the federalgovernment granting $321.1 million in loans to the company. Theapplication already has been sent back once.
There always seems to be a caveat, though, in this economic andpolitical environment.
Nucor is warning that how far it goes with its iron-steelproject depends upon the future of environmental restrictions,particularly the cap-and-trade approach on emissions that the Obamaadministration favors. Originally planning to start its Louisianaproject with a coke-fueled blast furnace to convert scrap metalinto iron, Nucor instead will start with a natural-gas firedfurnace to convert iron ore into pig iron.
Still, the ups-and-downs are a stark contrast from the lostdecade of the 1990s for Louisiana when officials deluded themselveswith the notion that prosperity would be legalized gambling andtourism. Perhaps, at an absolute minimum, the state has turned acorner in its economic development efforts after all these years.Copyright © 2014, Los Angeles Times