Closing the Gap: Economic Evolution

• By GARY PERILLOUX
• Advocate business writer
• Published: Jul 22, 2007 - Page: 1A

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Two business lessons Louisiana should know by now are that economic development isn’t cheap — and the rules can change overnight.

Witness the summer of 2005.

A year after Gov. Kathleen Blanco landed her first big business coup — a $100 million investment in Alexandria lured by $65  million in incentives — Union Tank Car had 235 skilled welders poised to build rail cars.

Then came Hurricane Katrina. Lured by high-wage recovery work, the welders went south.

“You could probably hear the collective gasp,” said Bruce Winslow, a Union Tank Car spokesman. “We all caught our breath to think we might have invested in this plant and it was all ready to go and there was nobody to come work at it.”

In what Winslow calls a well-orchestrated scramble, the state Department of Labor helped woo nearly 1,000 people to a Union Tank Car job fair, hundreds of applicants were screened and the Louisiana Technical College’s Alexandria campus quickly trained 200 welders from scratch.

Today, Union Tank Car has hired 600 of its eventual target of 850 people and is “doing really well,” Winslow said.

But stopgap solutions are not how any state wants to do business.

Louisiana’s skilled labor shortages existed before the 2005 hurricanes in a state where only 41 percent of the total population works, the nation’s worst rate and 10 percentage points below the U.S. average. The storms compounded the problem.

The state hasn’t solved the fundamental flaws that dog its economic development on a daily basis. And the world knows it.

When a respected think tank unveiled its 2007 economic report cards for the 50 states, Louisiana was largely flunking again:

• An “F” for what it’s like to live and work in the state.
• A “C” and a surprising glimmer of hope for what it’s like to own and operate a business in the state.
• But another “F” for public and private investment aimed at lifting Louisiana’s fortunes for future generations.

Louisiana’s recent near-miss with ThyssenKrupp’s $4 billion steel mill project illustrates the state’s economic problems.

ThyssenKrupp will build in Alabama despite a $1.6 billion Louisiana incentive package.