Louisiana Officials Say State Could Not Meet ThyssenKrupp's Steel Mill Requests

The state's final bid of $2.9 billion was rejected by German steel maker; Alabama is still in the running.

BATON ROUGE, Louisiana (AP) - Louisiana's final offer in the competition for a $2.9 billion steel plant fell below what the German steel manufacturer sought, the state's economic development secretary said Tuesday.

''It was not what they asked for. We felt it was too rich for us to compete on that level,'' Economic Development Secretary Mike Olivier told a House committee reviewing his budget for the upcoming fiscal year.

But Olivier also said he did not think Alabama - Louisiana's sole competitor for the project - was able to meet the request from Duesseldorf-based steel maker ThyssenKrupp AG. When questioned about specifics, he wouldn't provide details about what ThyssenKrupp sought or what Louisiana offered.

Louisiana officials, including Gov. Kathleen Blanco and Olivier, made their final bid for the plant in writing on Friday after several days of negotiations with ThyssenKrupp officials in New York. Olivier said Louisiana offered what state officials believed they could afford.

''Our position is less than what their expectations were,'' he said, later adding, ''It's a very expensive project, and I don't know that any state could meet that expectation.''

In Alabama, Gov. Bob Riley's spokesman, Jeff Emerson, said talks with ThyssenKrupp officials are continuing, and the state has a policy of not commenting about ongoing economic development projects.

Alabama's chief industrial recruiter, Alabama Development Office Director Neal Wade, said, ''Our negotiations with ThyssenKrupp have been nothing but positive, and because we have signed a confidentiality agreement with the company, we're not going to discuss our incentive package publicly.''

A ThyssenKrupp spokesman would not comment in detail on the proposals, citing confidentiality agreements with both Alabama and Louisiana.

''Over the coming weeks, we will be analyzing many elements to guide us in our selection of an ultimate site and hope to make a decision as soon as possible,'' Christian Koenig, a Michigan-based spokesman for ThyssenKrupp, said in an e-mail.

ThyssenKrupp is deciding between a location in St. James Parish along the Mississippi River between Baton Rouge and New Orleans and a site near Mobile, Ala. A decision from the company about where it will locate its new steel mill - and the 2,700 jobs that come with it - is expected before mid-May, Olivier said.

The plant is expected to begin operation in 2010. It would be the German company's first steelmaking operation in the U.S., processing carbon steel and stainless steel for automakers, electrical companies, appliance manufacturers and more.

The competition between Alabama and Louisiana has been intense. Both Blanco and Alabama Gov. Bob Riley have met with ThyssenKrupp officials in Germany, and both states are offering tax breaks and other incentives to attract the company.

The Louisiana Legislature, pushed by Blanco, approved a $300 million fund late last year for site improvements and construction to help lure the steel plant to St. James Parish. Blanco also is asking legislators to add another $100 million to that fund for ThyssenKrupp.