Vought-Alenia plot full of twists and turns BY JOHN P. MCDERMOTT Of The Post and Courier Staff Gov. Mark Sanford got the urgent call last month from the head of the state Commerce Department. Bob Faith needed to talk. At stake: a $560 million manufacturing complex that Texas-based Vought Aircraft Industries Inc. and Italy's Alenia Aeronautica were proposing to build together at Charleston International Airport. Sanford's commerce secretary was pretty sure the project was locked up. Still, Faith needed to smooth out some last-minute details. In person. He and top staffer Jack Ellenberg were flying to Italy to meet for the first time the top executive of Alenia's parent company, Finmeccanica S.p.A. Faith asked Sanford to rearrange his hectic schedule and join them. "We need to go over there. We need to kill this thing dead," he told the governor. Sanford agreed, and the small entourage boarded a plane Nov. 10 and flew to Rome for a daylong meeting with Finmeccanica's top brass. They came home the next morning. "They wanted to meet eyeball to eyeball," Sanford said. "That's part of how business is done, particularly when you're making a big investment in a foreign land." The clandestine, last-minute meet-and-greet paid off handsomely last week when Vought and Alenia announced that North Charleston would be the site of a new cutting-edge manufacturing complex that will make structural aircraft parts for Boeing Co.'s new passenger jet. The companies plan to hire about 600 workers earning an average of $40,000 to $50,000 a year by 2007. "It's a happy ending to an awfully long story," Sanford said. The Vought-Alenia plot line was at times fast-paced and unpredictable. It also featured an unlikely cast of characters whose contributions, however small, helped seal the deal, including two federal lawmakers, a fishing boat captain and an accommodating overseas diplomat. "A lot of people were involved in this," said Faith, who last week shared his blow-by-blow account of the state's intricate three-way mating dance with Vought, Alenia and Boeing. BEAUTY CONTEST Boeing sowed the seeds of the Lowcountry's biggest-ever economic development deal, code-named Project Buffao, in early 2003. The aerospace giant was looking for a site where it would assemble its new-generation airliner, the 7E7 Dreamliner, and it invited any state or local government interested in the $900 million investment and 1,200 jobs to fill out a 27-page questionnaire. In the tight-lipped world of economic development, Boeing's eagerness to publicize the preliminary phase of its site selection was highly unorthodox, drawing comparisons to a Broadway casting call or an open beauty contest. The ploy, of course, worked splendidly. Offers poured in from 44 states, including South Carolina, which pitched a 400-acre site at the entrance to Charleston International. "We're hot and heavy after it," Faith said in June 2003. "We have as good a shot as anybody." He was right. Charleston's proposal impressed Boeing so much that it ended up on the short list. In the end, however, the company, for various political and financial reasons, picked Everett, Wash., the longtime home of its commercial aircraft manufacturing business. Faith said the loss was "a bitter pill" to swallow. "There's no big award for second place in economic development," he said. The following February, Boeing and Commerce officials met to go over the strengths and weakness of the state's offer. Faith said the company for the most part praised the state, and executives indicated that Boeing would keep Charleston in mind for future investment. "They thought Boeing would do something here," he said. Faith's first thought, in fact, was the eventual replacement of the 7E7. "We said, 'We'll be in line to take a shot at doing the final assembly for that plane when it comes out. Little did we know," Faith said. Within a few weeks, a Boeing consultant who by then was working for Vought contacted the state to see whether it was interested in recruiting the airframe supplier. "That's when all of the sudden we geared right back up and got going on this deal," Faith said. Vought sent its representatives to inspect the site and check out the region for the first time in April. Boeing officials tagged along. It was a routine visit. "The Vought executives were impressed with everything they saw," Faith said. They returned later that month, this time with some Alenia officials in tow. Heyward Horton, project manager with the Charleston Regional Development Alliance, said the group met privately with officials from other big South Carolina manufacturers, including the German-based automotive firms Robert Bosch and BMW. "They were interested in hearing what the experience was with companies that already located here," Horton said. They asked questions about workforce recruiting, training and incentives, and whether the state would hold up its end of bargain. "Those things will eventually will come out if you have missteps along the way," Horton said. The Vought and Alenia folks also spent some time exploring the Historic District on foot. Steve Dykes, economic development director for Charleston County, said he and Horton "ended up being the boots on the ground, so to speak." "We're both basically lifers here, so we were in a position to tell them a lot of things that I don't know you would even get from a tour guide," Dykes said. "We gave them the local color, that's the best way to describe it. ... Walking back to the hotel downtown, I think they felt very much like it was like Europe." That night, a chef from J. Bistro restaurant in Mount Pleasant prepared a Lowcountry-style meal at Faith's waterfront home in the Old Village. Faith also took his guests out for a spin on his boat. "It was a great kind of bonding event we had," he said. HEART OF TEXAS The follow-up didn't go so swimmingly. Tom Risley, Vought's president and chief executive, wanted to meet the governor and Faith face to face. He arranged a 7 a.m. breakfast meeting in Dallas. "It was critical meeting," Faith said. Faith nearly missed it. Thunderstorms diverted his plane to Waco, some 200 miles away. It was after midnight when he landed. The rental car agencies were closed and there wasn't a taxi in sight. Slightly panicked about missing the early-morning meeting, Faith went looking for a ride. "One of the guys at a counter said, 'I know a guy who will sometimes drive people around.' And this guy ends up driving me two hours to Dallas in the middle of the night," said Faith, who forked over $200 for the ride. It was worth every penny, he added. "We were feeling pretty good at that point that we've got Vought wanting to do this deal," Faith said. Risley said he was impressed by the state's presentation. "The complete package was there," he said last week. By now, Charleston's main competition was Mobile, Ala., and Tulsa, Okla. Back in Columbia, meanwhile, Commerce uncovered a serious problem with one of the key incentives it was offering Vought. The agency had dusted off a never-before-used perk that lawmakers passed years ago for a specific air cargo carrier. Commerce official Daniel Young discovered that Vought wouldn't qualify for any of the maximum $50 million in funding because of a glitch in the wording. A fix would require legislative action. Faith said one of his first calls that day in late April was to Rep. Bobby Harrell, chairman of the House Ways and Means Committee. While they spoke, Vought executives were boarding a plane in Charleston for Alabama. "Bobby said, 'How fast do you need it?' I said, 'I need it right now,' " Faith said. Other General Assembly power-brokers were summoned, including Sen. Glenn McConnell, Rep. David Wilkins and Sen. Hugh Leatherman, and the amendment was attached to an unrelated tax bill. Harrell called Faith back about an hour after their initial conversation and told him the newly worded legislation had just passed the House and was going to the Senate for passage the next day. "Normally that's something that takes weeks, if not months," Harrell said. Faith said he relayed the good news by phone to Young, who had just landed in Alabama with the Vought team. "They were still on the runway," Faith said. "I could hear applause break out in the plane." DIPLOMACY It was now time to close the deal with Alenia, starting in the company's own back yard. As part of a previously planned trade mission to Europe, Faith and other Commerce officials made a side trip to Naples in June to meet executives and tour the aerospace company's production facilities. "Then we started getting some traction on the Italian side," Faith said. But Alabama officials weren't giving up without a fight. "One thing that Alabama was pushing hard in its advantage over us was the seniority and strength of its congressional delegation," Faith said. "Vought and Alenia both have a lot of military business, and that's something they had to be sensitive to." South Carolina countered by inviting U.S. Sen. Lindsay Graham and U.S. Rep. John Spratt to meet with top-ranking Vought and Alenia officials in early August at the Farnborough International Air Show near London. The lawmakers agreed to make the trip, carrying with them a letter of support for the companies signed by every member of the state's congressional delegation. "It was a real coup. ... When we showed up with that team, that really, really impressed the Italians," Faith said. "It really showed them we were serious." One Alenia executive wanted to be doubly sure, so he decided to fly to the States to see the Oklahoma, Alabama and South Carolina sites in August. "One more hurdle," Faith said. The plan was to send the state plane to Alabama to pick up Roberto Assereto, Alenia's chief operating officer. In a spur-of-the-moment decision, Sanford decided to hop on board the 4 a.m. flight and greet Assereto personally. He reasoned that the flight back would give them time to chat. It also gave the governor a chance to show off South Carolina. As they approached the Lowcountry sea islands, Sanford said he instructed the pilot to hug the coastline 100 feet above the water so his guest could take an up-close look at the marshlands, creeks and beaches. "That's an awfully impressive way to come into Charleston," Sanford said. While in town, Faith took Assereto deep-sea fishing. An avid angler who has a home on the Mediterranean Sea, the Alenia executive instantly bonded with Faith's fishing boat captain. "Roberto was saying, 'This is how we fish in the Mediterranean, how do you fish here?'" Faith recalled. Alenia was now on the hook, and over the next few months the company and Vought worked to finalize their joint-venture agreement and their contracts with Boeing. The protocol visit to Rome four weeks ago cemented the deal for South Carolina. Sanford said he made the one-day trip because he had not yet met Pier Francesco Guarguaglini, chairman and chief executive of Alenia's parent company. "One of the things they wanted to do was to meet the chief executive officer of the state," Sanford said. Faith said it didn't hurt matters that Sanford was able to arrange lunch for his hosts that day at the private residence of a longtime personal acquaintance, Melvin Sembler. Sembler, a big-time shopping center developer whose Florida company built the Target complex in North Charleston, also happens to be U.S. Ambassador to Italy.
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