Gov. Tate Reeves stood proudly at a podium in the ornate Mississippi Capitol on Wednesday and boasted “it is a great day to be a Mississippian” after lawmakers approved his proposal to provide $246 million in incentives to lure a $2.5 billion aluminum mill creating 1,000 jobs to Lowndes County.
It was also a great day to be Tate Reeves.
It is reasonable to assume that Reeves’ 2023 reelection campaign will cut political ads referencing his first major economic development project and even video of that Capitol news conference.
Reeves will be a favorite to win in 2023 and the aluminum mill built by Fortune 500 company Steel Dynamics will be a feather in his political cap. But history tells us that the enticement of a major economic development project does not always help a candidate win.
In the summer of 2003, a proud Gov. Ronnie Musgrove was on hand as Nissan opened the state’s first and still largest auto manufacturing plant near Canton. Of course, Republican Gov. Haley Barbour defeated Musgrove a few months later in November 2003.
Musgrove had headwinds, such as a growing Republican voting trend in the state and other issues, that Reeves will not face. But the 2003 story is an illustration that economic development does not always equate to electoral victories.
“We did not set the timetable for when the plant would open,” said Musgrove, now an Oxford resident, when asked if he believed at the time the plant would be a boost for his campaign.
Musgrove demurred on responding to questions about whether he should have gotten more credit for the plant.
But he was more than willing to talk about the circumstances that led to the state landing its first automotive manufacturing plant — viewed as a watershed event that arguably has withstood the scrutiny of time.
In 2000, his first year in office, Musgrove was heavily criticized for calling an August special session to revamp the state jobs incentives laws and to create the Mississippi Development Authority.
“We did not have the incentives to attract a major auto manufacturing plant. Despite some work by past governors and legislators, our incentives were designed for 1950s-era manufacturing,” he said.
But within a month of that new incentive package being approved by the Legislature, the state received a phone call from Nissan. The state was asked to put together a proposal.
Musgrove asked if he could hand deliver the proposal to then Nissan Chief Executive Officer Carlos Ghosn.
“They asked why I would want to go to that trouble. I told them I wanted to convey how serious the state of Mississippi was,” Musgrove recalled. He was willing to fly to Japan to deliver the proposal.
But the flight to Japan was not necessary. Ghosn was going to be at the company’s North American headquarters in Los Angeles and had 30 minutes free to meet with Musgrove.
The governor then called a political rival in terms of party politics — Trent Lott, the Mississippi Republican who was the majority leader of the U.S. Senate. He asked Lott if he wanted to be a part of the meeting.
As the meeting was breaking up, Musgrove pulled a small Japanese cell phone from his coat pocket, handed it to Ghosn and told him when he called to tell him Mississippi’s proposal had been accepted, he could press one on the cell phone and reach him at the Governor’s Mansion.
Ghosn was impressed.
“He looked at the phone and said, ‘That is pretty good, governor,’” Musgrove recalled.
Sure enough, a few weeks later Musgrove received the phone call from Ghosn informing him Nissan was accepting Mississippi’s bid.
Ghosn then called Lott.
When he and Lott talked later, “The first thing Trent said was, ‘Did he call you on that phone?’” Musgrove said. “I told him I didn’t know.”
But days later, the Legislature passed a $295 million package to lure Nissan to build a $1.2-billion plant employing 4,000 people.
The Steel Dynamics project is supposed to employ 1,000 with a capital investment of $2.5 billion. Reeves calls the project the largest single capital investment in state history.
No doubt, the investment is significant. But it stands to reason that the cost to build plants and to equip plants would increase over time due to inflation.
According to the Nissan web page, Nissan has now invested $4 billion in the state and employs 5,000 with an additional 25,000 spinoff jobs from suppliers and other companies impacted by the massive plant.
Reeves has said he believes over time Steel Dynamics will have a similar impact.
He hopes, unlike Ronnie Musgrove, he can see the impact of the plant during his second term as governor.