Hyundai Bid Numbers Higher Than Nissan

JACKSON, Miss. (AP) -- Mississippi spent more in its failed bid for Hyundai Motor Co. than it did successfully luring automaker Nissan two years ago.

Expense documents obtained by The Associated Press show the state spent $386,241 between late July and early March trying to attract the South Korean company.

Hyundai was considering Mississippi for a $1 billion auto production plant, its first in the United States, but narrowed the field to Alabama and Kentucky last month. The plant is expected to employ 2,000.

The tab for winning Nissan's $930 million assembly plant in Madison County and its 4,000 jobs was $359,625 - $26,616 less than Hyundai expenses, state records show. Sherry Vance, spokeswoman for the Mississippi Development Authority, said vying for large industrial projects is a costly endeavor, but the rewards outweigh the risks.

For example, Gov. Ronnie Musgrove says Nissan and its suppliers have invested more than $1 billion in central Mississippi over the past 16 months. The plant is scheduled to open next year and create some 26,000 jobs at spin-off businesses.

"You either decide you're willing to compete and make the necessary expenditures or you're simply eliminated,'' Vance said Friday. "You've got to be in the game.''

And all was not lost when Hyundai nixed Mississippi and a site near Pelahatchie, about 25 miles east of Jackson, Vance said. ``I can't buy the kind of publicity we garnered worldwide,'' she said. ``You're talking about the international press, the national press and the trade press.''

Mississippi paid its first Hyundai-related expenditure in July - a $7,695 helicopter flight. The state was still paying bills for airline flights related to the project in early March, a week after Hyundai winnowed its choices and eliminated Mississippi and Ohio. Itemized expense records show the state's primary costs were for foreign and domestic travel and engineering studies at potential sites. The state also incurred charges for legal services, passport photos, meals, lodging, cell phones, labor surveys and gifts for Hyundai executives such as bowls made of Mississippi wood and pottery. The biggest expense was for engineering.

Over a seven-month period beginning in August, the state paid Jackson-based Waggoner Engineering $212,035 to determine the suitability of certain Mississippi sites for road, utility, water and sewer improvements. Waggoner also billed the state a similar amount in 2000 for Nissan-related work - $201,955.

Harry Gibbs, who heads the MDA's national and international division, said the eventual Nissan site in Canton had been considered for other projects over the years. The fact that engineering and other studies had been done made it a likely contender in the Nissan stakes. Gibbs said he hopes the Pelahatchie-area property and others identified in the Hyundai search will have similar prospects.

``The next time, we'll have a lot of this information in the bank,'' he said.

Beginning in December, state officials flew to South Korea, Washington and California, among other places, while recruiting for what became known as "Project Beach.'' Musgrove traveled twice to South Korea, once in December and again in February. His ticket in December was $4,083; the one in February was $3,208. He wasn't alone traveling overseas. Others who made trips were MDA Executive Director Bob Rohrlack, deputy director Jay Moon, Tracy Huffman of Waggoner Engineering and Buzz Canup, an engineering and site consultant who also does contract work for MDA on the Nissan project.

The state's tally for commercial airline tickets to South Korea, according to records: $38,626. The state spent another $25,000 on helicopter flights and $17,604 using state planes for trips to Nashville, Atlanta, Dallas and elsewhere. Brian Corde, location consulting director for Mintax International Group in East Brunswick, N.J., said helicopters and small planes often are the vehicles of choice for site tours of large areas.

``A lot of times you've got people who want to see a bunch of different sites in a short period,'' said Corde, who has worked on similar projects. ``Some sites in your area may not have a lot of access.''

Corde said he didn't consider Mississippi's total Hyundai bill to be unreasonable. ``That seems about right for the magnitude of the project,'' he said.

Officials in Ohio on Friday were still calculating the cost of their unsuccessful attempt to win the Hyundai plant. Travel and site selection costs typically are minimal compared with the coup de grace of the recruiting process: the lucrative package of incentives that states offer prospective corporations. To lure Nissan, Mississippi ponied up $295 million to cover such things as site acquisition and preparation, highway construction and work force training.

Musgrove wouldn't say last month if the state had started to create a similar proposal for Hyundai, which is expected to announce its location in the next few months. Finalist Alabama has already acted. Two weeks ago, that state's House and Senate passed separate bills aimed at providing up to $118 million in incentives for Hyundai.