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While casual observers may believe Kansas City was used as a pawn by Montreal-based Bombardier merely to extract more concessions from Canada, experts say that’s not really the way it works.
“Typically, these projects are very competitive,” said Jonathan Sangster, a senior manager at CBRE Consulting in Atlanta. “People don’t have time to waste going through these motions.”
And sometimes the Kansas City area wins in the corporate recruitment process.
In 1996, for example, Kansas City edged out Omaha, Neb., and Louisville, Ky., for a coveted Harley-Davidson motorcycle plant. Farmers Insurance Group picked Olathe over Oklahoma City and Phoenix two years ago for a 950-person service center, and the Los Angeles-based firm now has 2,000 total employees in the area.
Sangster has been in the national site selection business for 10 years, participating in more than 125 deals. Not once has he experienced a situation where the company already had made a decision and was only going through the motions to up the ante for incentives.
“You usually don’t see that with larger companies,” he said. “You can never say it doesn’t happen, but it would be rare.”
That’s not to say competition doesn’t make communities dig deeper in their pockets to attract a business.
Quebec Premier Jean Charest told reporters his province “adjusted” its loan offer in response to the competition from Kansas City, according to The Canadian Press. Quebec alone is investing $117 million in the Bombardier C Series project and the Canadian government another $350 million.
But the number of visits that Bombardier officials made, and the exhaustive research about the site, work force, cost comparisons and educational opportunities, indicate that Kansas City was a contender for the $375 million aircraft assembly plant that ultimately went to Montreal.
The company’s top executive, Pierre Beaudoin, even traveled to Kansas City and Jefferson City in late April to scout the site and dine with Gov. Matt Blunt.
“We believe the Bombardier search process was conducted fairly and professionally with no predetermined outcome,” said Bob Marcusse, president and CEO of the Kansas City Area Development Council.
“We always knew Montreal, as the incumbent, had an advantage. We thought we could overcome that advantage. This was the most exhaustive and serious review we have ever seen.”
Greg Steinhoff, director of the Missouri Department of Economic Development, said Bombardier representatives spent an “unbelievable amount of time” in Kansas City evaluating a variety of factors regarding the C Series assembly plant, which was expected to employ 2,100 people.
“We were in discussions about every day for several months,” Steinhoff said. “Yes, you can sit back and Monday morning quarterback this, and you can do this with every single deal you lose.
“You have to accept the criticism and make sure you have the process in place to evaluate the deals.”
He said his agency, which worked to persuade the Missouri General Assembly to approve a $240 million incentive package for Bombardier, does not enter the competition lightly when it comes to choosing projects to pursue.
“I wouldn’t have asked my staff and the rest of the team to put in all this work if we thought we were just being used so Canada could get this deal,” he said. “Early in the process, you have to determine whether the interest is genuine and your proposal will actually work for the company.”
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