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Unprecedented development expected around ThyssenKrupp project

Normally when you have a big economic development project in the wings, different states are fiercely competitive in coming up with the best package of incentives to attract the new industry to their state. But in the recent case of the $3.7-billion ThyssenKrupp AG steel mill that has announced plans to locate 25 miles north of Mobile, both Mississippi Gov. Haley Barbour and Florida Gov. Charlie Crist endorsed Alabama’s bid for the plant.

The site in Calvert on the Tombigbee River has the benefit of river transportation, and is also convenient to interstates and railroads. The company received approximately $400 million in incentives for the project.

The steel mill planned by the German conglomerate that will employ some 2,700 people is expected to draw employees from throughout the region and also spark significant spin-off developments.

Barbour recently participated in a regional workforce development conference with Alabama Gov. Bob Riley where it was announced that Alabama and Mississippi have received a joint $15-million federal grant to train workers in both states to work at the plant.

“We have a lot in common, and all that’s dividing us is that little old state line,” Barbour said.

Barbour said the biggest challenge for the new project would be providing consistent quality workers.

Riley predicted the steel mill would create unprecedented development in the region.

“There’s going to be as much development in this area over the next two years as there has been in the last 40,” Riley said.

Mississippi working with Alabama and Florida to land the project is consistent with the thinking that economic development doesn’t start and stop at state boundary lines.

“The Mississippi Development Authority (MDA) advocates regional economic development strategies, including those that cross state lines,” said Gray Swoope, MDA’s executive director. “Alabama and Mississippi enjoy a good working relationship and support each other on projects that can mutually benefit both states. The ThyssenKrupp deal will have a significant impact on South Mississippi, especially George and Jackson counties. MDA’s role will be to help those communities maximize this opportunity to benefit Mississippi.”

Swoope said this investment is another testament that the future location for cutting-edge technology is in the Southeast United States.

“SeverCorr, Toyota and PACCAR are a few other companies proving that fact,” Swoope said.

Housing critical

George Freeland, executive director, Jackson County Economic Development Foundation, said there is no doubt the steel mill will have a positive impact on the entire region.

“And that region certainly includes the six southern counties in Mississippi,” Freeland said. “That being said, I have to caution us that we as a region have to be particularly diligent in our efforts to increase housing stocks. This plant won’t be stood up until the 2010 time frame. So we have a period of time to focus on the housing issues so we are able to respond to the housing needs for this project and others, for that matter.

“Will it positively impact the region? Yes. The extent that it positively impacts southern Mississippi and the Coast of Mississippi will be driven by our ability to respond to housing needs and workforce availability.”

Freeland said that failure to solve the shortage of available housing that currently is making workforce availability a problem would also cause hardships to existing employers such as Northrop Grumman Ship Systems. But he said that companies like ThyssenKrupp AG and others the foundation is currently engaged with have a high degree of confidence in the leadership of the region to be able to adequately address issues of housing and overall workforce availability. If they didn’t, they would not be moving ahead with projects such as the steel mill and the proposed KC-30 air tanker project. Northrop Grumman-EADS has proposed the project for Brookley Field in Mobile. Boeing has also put in a bid for the project.

Freeland said the U.S. Air Force is expected make a decision on awarding bids for that project within the next 90 to 120 days. The project, worth $30 to $40 billion, would replace 179 large refueling aircraft for the Air Force. Freeland said if Northrop Grumman-EADS is selected, it would have a huge impact on the growing reputation of the aerospace industry corridor stretching from the Florida Panhandle to Stennis Space Center.

“The point of all this is that not only here in South Mississippi are we engaged in regional economic development collaboration among multiple counties in our own state through the Mississippi Gulf Coast Alliance for Economic Development, but we also collaborate within the multi-state areas to create an identifiable image for this region in key sectors, one of which is aerospace manufacturing,” Freeland said. “We are collaborating with our Mobile colleagues at the Paris Air Show in the month of June. For the first time, we have agencies from multiple different states working together at the world’s premier air show. That, in and of itself, certainly represents proactive, aggressive economic development momentum amongst our region.”

‘Incredible’

Sue Wright, executive director, George County Economic Development Foundation and Chamber of Commerce, expects their biggest impact to be providing workers for the project. In addition to the 2,700 permanent workers needed at the state-of-the-art mill, an estimated 29,000 construction workers will be needed.

“That is incredible,” Wright said. “George County has always been a bedroom community, so we are looking to continue to provide a workforce. We see some direct job opportunities coming out of George County, but even more indirect jobs coming about as we see the ripple effect coming down to George County. As the economy improves and the region grows, it will stimulate jobs throughout the region.”

George County opened a new 1,200-acre industrial park in April partly in anticipation of the possible KC-30 tanker project. After learning about the possibility of the ThyssenKrupp AG steel mill, the county sped up construction of the park to be available for new opportunities.

“We think we will be positioned strongly for consumers of the steel that ThyssenKrupp will be producing,” Wright said. “Gov. Riley is saying the regional impact is so big that it will grow Mobile to be one of the premier cities on the Gulf Coast. We could envision being similar to Houston’s economy. In terms of Lucedale’s opportunity, we definitely think we are going to rise with the economy of the region.”

Wright said there was already a major impetus for new home building to replace housing lost in Hurricane Katrina. Now there is even more incentive for new home building in the area.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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