DED chief hopes funding keeps NASA plant in N.O.

BYLINE: GARY PERILLOUX; Advocate business writer;

On a day when an LSU professor spoke of his harrowingly close encounters with a $100 million antenna in outer space, Louisiana's top economic development official said the state is committed to spending more than that - on the ground, in New Orleans - to spur future space missions.

The $102 million - spread out over six years - would fund enhancements to the National Center for Advanced Manufacturing and a proposed office and lab building at NASA's Michoud Assembly Facility in east New Orleans.

Michael Olivier, who heads the state's economic development department, described the investment as a bridge to keep Louisiana's 46-year manufacturing role in NASA missions secure for another two decades or more.

"This is NASA's only manufacturing plant in the United States, NASA's only manufacturing plant anywhere in the world," Olivier said on the final day of the 2007 Governor's Conference on Economic Development. "It's where the next generation to Mars begins. And so we're making a commitment to invest."

The appropriation Gov. Kathleen Blanco and Olivier's department will seek this year from the Legislature is $20 million. Blanco signed a memorandum of understanding with NASA in February to pursue new investment at the site, but Olivier's speech Thursday was the first indication of financial commitments the administration would be seeking.

Though Lockheed Martin's assembly of external tanks is winding down as the space shuttle program ends by 2010, NASA is ramping up its Constellation space program to revisit the moon and, for the first time, send manned missions to Mars.

Lockheed Martin already has won a $3.9 billion contract to build an Orion crew launch vehicle by 2013, with some of the manufacturing to take place in New Orleans and final assembly in Florida.

Meanwhile, construction of the Ares I upper stage rocket that will power Orion will take place at Michoud. NASA will award that contract by September, with a number of companies - including Boeing and an Alliant Techsystems team that includes Lockheed - seeking work estimated in the hundreds of millions per year.

The commitment of more state dollars - Louisiana has spent $20 million to date at Michoud - would extend research and development needed to produce high-strength materials used to build spacecraft.

Created in 1999, the manufacturing center at Michoud is a partnership of NASA, Louisiana and the University of New Orleans College of Engineering.

"We want to enhance the NCAM," Olivier said after his speech. "And (NASA) needs a facility, they need office space. We also want to attract other companies that could be vendors."

The proposed 40,000-square-foot office facility would be built on 225 unused acres of the 832-acre Michoud site, Olivier said.

Though firm job commitments haven't been made, contractors bidding on NASA work have indicated they expect employment to remain at the current Lockheed Martin levels of about 2,000 people and a $130 million payroll. At the height of the space shuttle program in the 1980s, Michoud's space work employed 5,000 people.

Today, 4,200 people work at the Michoud site, many of them in federal, state, university and research agency roles.

After Olivier's speech, LSU professor and former astronaut Leroy Chiao chronicled his 229 days of adventure in space that included more than six months with Russian cosmonauts on the International Space Station.

Thursday marked the 46th anniversary of the first manned space flight by Cosmonaut Yuri Gagarin, Chiao noted.

"Why explore space?" he asked. "First of all, it's just plain cool."

But using the most conservative estimates, dollars invested in space exploration return twofold benefits, he said. Though ramping up again, NASA's budget is but 1 percent of the U.S. budget.

Yet it was watching the first Apollo moon landing as an 8-year-old that convinced the engineer and former NASA mission commander to strive for a career that sent him into orbit.

"I think this is the most important reason why we explore space," he said. "The seed was planted in my head that this is my dream, this is what I wanted to do."

Dennis Cuneo, a graduate of Loyola law school in New Orleans, later said he never dreamed he'd become Toyota's second-ranking executive in North America, where he led all site selection work for the company's auto plants in the past decade.

His auto industry insights were the keynote address of a day that included speeches by Lt. Gov. Mitch Landrieu and economist Loren Scott.

Cuneo now splits his time as a Toyota consultant and Arent Fox lawyer in Washington, D.C.

The U.S. auto industry isn't in decline, it's merely changing, he said.

Toyota, a company that almost went bankrupt in 1950, is in the process of passing GM as the domestic industry's dominant player, an evolution Cuneo described as coming from striking a balance between auto economy, reliability and performance - the equation of American demand.

The company's recent announcement that it would build Highlander SUVs near Tupelo, Miss., didn't come at the expense of Louisiana.

A megasite near Monroe never was in the running in this race, though Cuneo has coached Blanco and Olivier on what it will take to become a competitor.

An extremely integrated education system, from pre-kindergarten to universities, tipped the scale to Tupelo, along with a crucial work force development.

"It was the work force in Tupelo," Cuneo said.

"That's the center of the furniture manufacturing, which is being off-shored to China. Furniture workers work hard and probably moving to an auto assembly plant will seem like a very nice job."

Cuneo said the site decision was a very close call, with Arkansas and Tennessee the other two finalists, "but on balance it was the furniture industry: We saw a potential work force."