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The tougher the times, the sweeter the deal for employers

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Major metal companies and metal-consuming manufacturers, particularly stampers and fabricators, have consistently received economic incentives from state and local governments, and often pit one against the other for the best deal.

Some of the projects will reach fruition if both sides hold to the long-term view that global steel demand will grow during the next decade and beyond.

A short list of plans announced by metal producers during 2008, including efforts by state and local governments to help those plans succeed, shows foreign investment to be quite significant. "From Russia with Love" could be the theme of the first two project announcements.

•?OAO Severstal, Cherepovets, Russia, is looking to invest up to $1 billion in its U.S. operations over the next several years, and executives at its Dearborn, Mich., mill are aggressively attempting to attract public funding. The Dearborn plant, formerly Rouge Steel Co., is one of several Severstal facilities being eyed for the investment, and Dearborn City Council is considering an economic incentive package aimed at attracting that $1 billion. The city and state have said they intend to move quickly to beat potential offers from other states.

•?Ohio took two big strides forward last May in landing a $1-billion steel plant planned for North America by Russia's OAO Magnitogorsk Iron & Steel Works (MMK). The Ohio Department of Development cleared two grants totaling more than $4 million aimed at helping MMK build the 1.9-million-square-foot plant in Scioto County in southern Ohio, although sites in Arkansas, Kentucky and Quebec also are under consideration. The plant, expected to cost between $650 million and $1 billion, could create at least 528 jobs, according to the company.

•?Sweden's Svenskt Stal AB (SSAB), Stockholm, in August revealed plans to expand quenched and tempered steel production in the United States. Two months later, after reviewing financial incentive packages proffered by state and local governments, SSAB announced that it would build the new heat-treating facility at its carbon steel plate mill in Mobile, Ala., creating about 120 jobs, rather than at its other carbon steel plate mill in Montpelier, Iowa.

•?ArcelorMittal SA, Luxembourg, and Nippon Steel Corp., Tokyo, have agreed to invest $240 million to double galvanizing capacity at their joint-venture I/N Kote LLP operation in New Carlisle, Ind. The partners expect to complete the facility in late 2010. The plan was spurred by the city's tax abatement package, plus state tax credits and state grants for job training assistance, all designed to lure 100 new jobs.

•?Kaiser Aluminum Corp. expects to begin production in late 2009 at its Kalamazoo, Mich., remelt/extrusion facility, creating more than 300 jobs. It is investing more than $80 million in the foundry operation, which will produce components for the domestic automotive market. Kaiser has received a $3.7-million tax credit from the Michigan Economic Growth Authority, $280,000 in employee-recruitment and job-training assistance from Michigan Works and a $100,000 economic development job-training grant from the township and Kalamazoo County.

•?Republic Special Metals Inc. plans to build a $60-million to $70-million manufacturing facility in North Jackson, Ohio, following a Mahoning (Ohio) County Commission vote that approved a 15-year real estate tax abatement for the company. The plant will initially create 50 to 60 jobs with an average annual salary of $50,000, according to Anthony T. Traficanti, chairman of the county commissioners, citing information from Republic.

One of the most vociferous proponents of programs to promote job creation is Michigan Gov. Jennifer Granholm, who in an October radio address cited the challenges affecting the national economy, but stated "We have not slowed down efforts to diversify this economy and to create jobs in Michigan. Despite (the) uncertainty here in Michigan, we will continue to be aggressive in our pursuit of every job and every company because we know that with the targeted plan to diversify this economy we can emerge from this time of challenge stronger than ever before."

She cited a new $30-million round of funding approved through the state's 21st Century Jobs Fund, which will help attract alternative energy companies as well as the traditional automotive sector to build or expand in Michigan.

The state of Ohio is so eager to attract investment that it has moved economic development up to the cabinet level. Gov. Ted Strickland in October signed an executive order that establishes the Ohio Economic Growth Cabinet, a subdivision of the governor's cabinet that will focus on creating jobs and increasing economic growth opportunities in Ohio.

"There is no greater priority for my administration than creating jobs and getting our economy moving again," he said.

The new cabinet will help ensure that all state government partners work together to advance and promote Ohio's economic growth. The cabinet will promote a comprehensive approach to business needs; develop a unified economic development budget designed to increase transparency for residents about the state's development; and monitor the progress of statewide development, with specific measures and performance targets.
CORINNA PETRY


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