Taylor Lawrence calmed a lot of nerves in Tucson Thursday.
The president of Raytheon Missile Systems, Tucson’s largest private employer, dispelled the long-circulating rumors that the company is planning to leave town with its thousands of high-paying jobs.
“We have 4 million square feet here that we’re producing missiles out of, and we have a number of franchise programs that are supported here in Tucson. And as long as those are needed by our customers, we’ll continue to manufacture those in Tucson,” he said in a news conference after his talk at a Tucson Regional Economic Opportunities Inc. luncheon.
If that weren’t reassuring enough, he went on: “As I’ve said, we’ll look at the right business decision when it comes to growth, and where we’re going to grow, and how we’ll grow. But the capabilities we have here in Tucson are a national treasure, and we don’t see that going away anytime soon.”
Case closed, right?
Unfortunately, no. During the same news conference and a question-and-answer session at the luncheon, Lawrence was also asked about the company’s decision in July 2010 to expand in Huntsville, Alabama, rather than Tucson. The choice not to put final assembly of the Standard Missile-3 here cost Tucson a few hundred high-paying jobs and shook our confidence, coming as it did in the depths of the unemployment wave. It also started those rumors of Raytheon’s departure.
Both times Lawrence answered the question, he pointed to two reasons Raytheon chose Alabama over Arizona: The Huntsville site has a large buffer zone around its new plant — necessary on the off-chance a missile explodes — and Alabama offered huge tax incentives that Arizona didn’t — and, really, can’t.
To the reporters, he explained: “The state needs to look at a job-growth incentive package. So, tax abatement incentives, all those kinds of things that, if you make a commitment to grow jobs and sustain those jobs for a period of time, then you get tax abatement kinds of incentives. That’s what Alabama did. And I think we need something like that here.”
To the luncheon audience, he said: “That’s something we need to think about as a state, because states now are competing. ... It’s not just about local issues. It’s about being competitive with other states to bring jobs into the state. That’s what it means business friendly.”
He also noted that he is friends with Elon Musk, the Tesla Motors CEO who just ran a five-state public competition for locating a huge battery plant. That plant, which Tucson bid for, eventually went to Reno, Nev., in exchange for the state’s promise of incentives worth up to .3 billion after Musk played the states off each other and ratcheted up the bids.
Lawrence’s enthusiasm for incentives should worry us, despite his assurances and our efforts to help them. Since we lost the 2010 expansion, Pima County has been checking off a list of costly accommodations that should help Raytheon expand here: Buying land around the plant to create a buffer zone, realigning Hughes Access Road, and on Thursday, starting the planning for a road to connect Interstate 19 at Sahuarita with Interstate 10 at Rita Road.
Those changes will help Raytheon grow here, if they choose to do so, Lawrence said: “Having the good infrastructure that allows businesses to move freely and connect to the airport, connect to transportation would be great not just for Raytheon but for high-tech industries and what we’re trying to do at the University of Arizona Science and Technology Park.”
But what about the next time Raytheon looks to expand? Will Lawrence, the believer in tax abatement and friend of Elon Musk, be happy with millions of dollars of public investment in infrastructure and land?
Look back at his answer on Tucson’s future, and you might not find it so reassuring: “As I’ve said, we’ll look at the right business decision when it comes to growth, and where we’re going to grow, and how we’ll grow.”
That “business decision” will surely include whatever incentives other locations offer Raytheon and the incentives Tucson and Arizona can scratch up. Given the state constitution’s gift clause — which prohibits giving public property to private entities — and our existing programs, we’ll inevitably fall short when it comes to incentives.
So, we’re doing what we can to give Raytheon room to grow and infrastructure that makes doing business easier. But that only keeps us in the game for the next expansion and perhaps keeps us from losing pieces of Raytheon’s existing operations. I suspect the missile company whose revenue and infrastructure comes from the taxpayer will be looking for a third level of public assistance when it’s time to make the next decision on expansion.
It would be nice if Lawrence’s commitment to Tucson were firm, but keeping us unsettled is probably better business for a company like Raytheon. As Musk showed, the uncertainty gives companies leverage.
Contact columnist Tim Steller at firstname.lastname@example.org or 807-7789. On Twitter: @senyorreporter
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