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Why did Louisiana miss the cut for an auto plant?


August 16, 2017
By Greg Hilburn
Originally Posted on Shreveport Times

A little more than a decade ago, Louisiana was on the short list to land a new Toyota auto plant that eventually went to Tupelo, Mississippi.

But today Louisiana has been shut out of the competition to land America's next auto plant, a $1.6 billion joint venture from Toyota and Mazda that will create 4,000 jobs, according to the Wall Street Journal.

The report lists 11 states in the hunt with Alabama, Kentucky, Indiana, North Carolina, South Carolina and neighbors Mississippi and Texas on the short list.

"If it's true, it's crushing," said Tana Trichel, president of the Northeast Louisiana Economic Alliance.

Trichel helped to develop the state's 1,400-acre Franklin Farm Mega Site near Holly Ridge that had been in contention for the Toyota plant in 2007.

"We were in top five and the best site," Trichel said. "But I believe politics made the difference. (Then Mississippi Gov.) Haley Barbour out politicked everybody."

Louisiana Economic Development Secretary Don Pierson wouldn't comment specifically about the competition to land the Toyota-Mazda plant, citing confidentiality concerns.

But Pierson did provide the following statement to USA Today Network:

"Generally speaking, we can assure you that LED continues to aggressively market Louisiana in the automotive sector and other target sectors," he said. "From the former GM site in Shreveport to the Franklin Farm site in Richland Parish to England Airpark in Rapides Parish and other locations across the state, LED continues to market the best industrial sites in Louisiana that match the needs of expanding companies.

"We will continue to put Louisiana’s best foot forward in site selection competitions for proposed automotive assembly centers and their suppliers. With a strong infrastructure, the nation’s most productive manufacturing workforce and the nation’s No. 1 state workforce training program, Louisiana can make a compelling case for new automotive investment."

When the Wall Street Journal's story was published last week, it created a social media disappointment buzz in Louisiana.

"So many Southern states mentioned in this article ... one that I love filled with great people unfortunately missing," Louisiana Association of Business and Industry President Stephen Waguespack tweeted.

"Damn shame we aren't even in competition for this plant. Tex, Miss, & Bama are beating us. Sad!" state Sen. Norby Chabert, R-Houma, tweeted.

Chabert told USA Today he is considering legislation to restructure the state's economic development and transportation and development agencies.

"I pointed out my displeasure to my friends at (LED) about our absence from the competition for the auto plant," Chabert said. "LED told me in fact that we are in the hunt, but not in the lead, whatever that means.

"They also told me that we were at a disadvantage because we don't have a pile of incentive money to offer. I just think we have to find ways to be more creative than our competitors."

Jim Clinton is president of the Central Louisiana Economic Development Alliance, which oversees England Airpark.

"We were surprised Alabama, Mississippi and Texas are lined up and Louisiana is missing in action," Clinton said. "It's not what we wanted to see.

"Certainly if we had the opportunity we would have submitted a proposal. I've not visited yet with the state to see if there's anything we can do to make sure the next time around Louisiana gets solidly in the hunt."

Scott Martinez, president of North Louisiana Economic Partnership, said Louisiana is more limited that its neighboring states because it has fewer sites.

"Other states have sites much easier to develop," Martinez said. "Any successful site for auto would almost certainly need to be located in northern or even central Louisiana. The Interstate 20 corridor connects with other southern plants and in southern Louisiana storms are too big of a hazard."

Martinez said the former General Motors plant in Shreveport, while built for auto manufacturing, is dated, and the Franklin Farms site needs more infrastructure, especially an interstate interchange.

"The GM plant was built almost 40 years ago," Martinez said. "Modern auto plans are constructed much differently today. They are much more linear with assembly lines a mile long.

"Shreveport's GM plan has opportunities for development, but probably not automotive."

Michael Olivier, chief executive of the Committee of 100 for Economic Development, was economic development secretary under former Gov. Kathleen Blanco when Louisiana competed for the previous Toyota project.

Olivier said the Franklin Farm Mega Site was designed with Toyota requirements in mind and specifically vetted by the company more than a decade ago.

"So what would that site not still be near the top of the list?" he said.

Olivier said he believes it's the state's precarious financial situation with consistent budget shortfalls as well as an uncertain and often temporary tax structure keeping Louisiana off the list this time.

"Remember, this is a site elimination process, not a site selection process," Olivier said. "Companies are unsure and uncertain about what their tax responsibility will be in the future.

"We have one of the lowest business tax burdens now, but we're running deficits year after year and companies fear the final solution will be on businesses. It's just my opinion, but it's relative to my experience."