Louisiana put forth what state economic development officials say was a strong, competitive package in its bid to land a coveted $1.6 billion joint venture plant by Toyota and Mazda that was awarded Wednesday to Alabama.
Louisiana Economic Development officials say the state offered the automakers a total incentive package that would have topped $500 million, including tax incentives and abatements, workforce training, grant money for construction of the plant and an adjacent mixed-use development, and a fund for land acquisition and site preparation.
Read LED Secretary Don Pierson’s statement on Louisiana’s loss of the Toyota-Mazda plant.
By comparison, Alabama put forth an incentive package of $379 million in tax abatements, investment rebates and the construction of a worker training facility. The total price tag, however, is expected to top $400 million after road projects and local incentives are factored in.
Pierson says the state is proud of the offer it put together and of the sites it marketed to the automakers, including the former GM plant in Shreveport, the Franklin Farm site in Richland Parish and England Air Park in Rapides Parish.
But national site selection consultants say while Louisiana, dollar-for-dollar, may have offered an attractive deal, Alabama had a couple of important advantages that likely took Louisiana out of the running before incentives even factored into the decision.
“Alabama has several established automotive assembly plants (including Mercedes, Honda and Hyundai) and Toyota actually has an engine facility in the region, and that is a big thing,” says Mark Sweeney of site selection firm McCallum Sweeney Consulting.
An experienced workforce trained in the automotive industry also likely factored into the deal, according to consultant Didi Caldwell of Global Location Strategies.
“I think their decision had to be heavily influenced by the technically skilled workforce that is already in Alabama,” Caldwell says. “Both the quality and availability of the workforce had to have played a huge role in the outcome.”
Neither Caldwell nor McCallum, both of whom have extensive experience working with both states, had any involvement in the Mazda-Toyota deal. Both also believe Louisiana was never a finalist for the project. Industry sources say the decision ultimately came down to Alabama and North Carolina.
“That tells me Louisiana got caught before the incentives would have even come to bear,” McCallum says.
While the deal is yet another win for a nearby Southern state that in recent years has pulled ahead of Louisiana on several fronts, McCallum and Caldwell say the economic development potential for Louisiana remains strong and that the buzz about the state outside its borders is not as bleak as it is on the inside.
“The buzz from the outside is that Louisiana is a very interesting place with a lot going for it,” McCallum says. “On the downside, you’ve had some belt tightening and there still hasn’t been a lot of diversification away from the petrochemical industry.”
For his part, Pierson says the state has learned a lot from the experience courting Toyota-Mazda and will redouble its efforts to be more competitive next time.
“We will re-examine the strategic investments in training and infrastructure that Louisiana needs to be a player in this industry,” Pierson says in a statement. “Through this process, and by working in partnership with our state, regional and local leaders, LED will redouble our efforts to attract automotive investment and jobs to our state.”
See Pierson’s full comments and the breakdown of the state’s incentive package here.
—Stephanie Riegel
