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ThyssenKrupp to Choose U.S. Site for New Steel Plant Today

Posted on: Friday, 11 May 2007, 06:00 CDT

By David J. Lynch

One of the largest industrial investments in the USA by a foreign corporation in several years is scheduled to take a major step forward today.

The board of ThyssenKrupp, meeting in Dusseldorf, Germany, is poised to select the site for a $2.9 billion steel plant that will provide 29,000 construction jobs and 2,700 permanent factory jobs when it begins operating in 2010.

After considering 67 locations in 20 states, the company has narrowed the decision to sites in Alabama and Louisiana. Both states have wooed the steelmaker with incentives worth about $300 million for new roads, tax breaks, worker training and site preparation.

For Alabama, winning the mammoth ThyssenKrupp deal would cap almost 15 years of success attracting foreign companies such as Mercedes-Benz, Airbus and Hyundai.

Louisiana doesn't have that track record, but state officials are hoping the new steel plant could jump-start post-Katrina prosperity. "This would be a lead event in spurring recovery," says Michael Olivier, secretary of economic development.

Peter Fisher, an economic development expert at the University of Iowa, warns that employers, able to play potential sites against each other, enjoy all the leverage in such negotiations. "It's very easy for a state to offer too much and even way too much," he says.

The ThyssenKrupp investment comes amid an uptick in foreign spending on such projects, according to OCO Consulting, a Belfast, Northern Ireland, research firm. Foreign firms pumped $22.1 billion into U.S. projects last year with about 80% going to new plants and the remainder into expanding existing facilities, says OCO's Carmel Ferris. That amount was almost double the 2003 figure.

The German steelmaker already employs 25,000 Americans and reported annual sales in the USA last year of $9.7billion. It plans to ship 30-ton steel slabs from a company mill in Brazil through the Gulf of Mexico to the new U.S. facility, where they will be turned into carbon steel and stainless steel.

The company's U.S. unit will feed auto plants across the South as well as construction projects. (c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.

Source: USA TODAY

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