By ANN PORTAL
The Register-Guard

Rohr Industries was nervous all along.

Now that the deal is dead, local officials admit they struggled from the beginning to convinve the Fortune 500 firm that Eugene - and Oregon - had the right stuff to be part of the aerospace company's expansion plans.

Aerospace is seen as a potentially key industry in Oregon's future, a badly needed step toward economic diversification. But "we probably shot ourselves in the foot with that one," said Lee Beyer, the city's industrial development adviser.

In the end, the Rohr deal was blown apart by worries that existing and proposed nuclear free zone regulations could lead to legal challenges of the Rohr plant of limit its production of parts for military uses.

But interviews with Rohr's sitting consultant and with state and local officials show that the company was skittish from the beginning about coming to Oregon.

"Even though we'd built this confidence in them, they still had a great hesitancy and uncertain feeling about what was going to come up, what might come out of the woodwork or what might change," said John Lively, executive director of the Eugene-Springfield Metropolitan Partnership.

More details about Rohr's eight-month courtship with the state, obtained from public records and interviews with the officials involved, suggest other reasons why the deal went sour.

Documents in the city's file on the Rohr deal also show that local officials, at Rohr's request, publicly downplayed the potential size of Rohr's manufacturing plant. The $15 million, 250-job plant unveiled at a January news conference was only the first phase of Rohr's plans for Eugene.

The Chula Vista, Calif., company's site plan, which wasn't shown to the public, actually included four buildings, not just one, set at angles along tree-lined streets in a campus-tyle setting.

Plans called for the proposed plant ultimately to have been worth an estimated $100 million, Lively said. Employment was projected to increase to 450 after three years and to as high as 1,000 after 10 years, he said.

Also submerged in the debate was the full value of public incentives being offered to Rohr.

The package, subject to approval by state and local governments, would have totaled nearly $6 million for roads and utilities, training programs, wetlands replacement and property tax breaks. A substantial part, more than $2 million, was for recruiting and training workers in future years as well.

Despite the amount of assistance offered to Rohr, the company remained nervous. Rohr executives had second thoughts about coming to Eugene each time they saw footage on the national news of people spiking trees or lying down in front of log trucks, said Lively and several other officials who worked with the company.

"Back in May, when we were first contacted, that was the first issue we started dealing with --the mentality, not just in Eugene, but in Oregon," Lively said.

Laurie Swanson, executive director of the Southern Willamette Private Industry Council, said she also sensed re-luctance on the company's part. "I do think there was this point we had to prove we weren't Backwater, USA," she said.

Local officials also had to cope with Rohr's insistence that no hint of the pending deal or the name of their company could become public, even as the number of people working on or aware of the project expanded last fall to include dozens of government officials, staff members and consultants.

"The company had told us all along, if this was predisclosed--the company's name--then the deal was off," Lively said.

The company was concerned that disclosure might hamper upcoming labor negotiations at Rohr plants in California, drive up land prices or prompt Oregon politicians to try to pressure the company's board of directors into coming here, he said.

"Firebird" was the projects code name, assigned by Rohr and used by local officials until early this year.

Firebird is the name of a ballet based on a Russian fairy tale. It also is the name of the first U.S. air-to-air guided missile made after World World II.

Rohr's communications director declined a request for a face-to-face interview to discuss why the proposed Eugene plant fell through. He also was not available at the time of a prearranged phone interview and could not be reached in later attempts.

The nation's leader in supplying jet engine shrouds, Rohr began looking in the spring of 1989 for a new location to manufacture high-temperature aerostructures, primarily engine parts. About 75 percent of the company's products are used in commercial jets. The rest is used in military and space applications.

"We looked at 17 states. It was basically the Sun Belt and the Pacific Northwest," said Reese Wilson, a Menlo Park, Calif., consultant working for Rohr.

In addition to the 16 other states, Wilson began by writing to Oregon economic development officials saying "basically that we had a high-tech enterprise, code-named Firebird, that would result in over 400 jobs." For unknown reasons, the state didn't respond.

Wilson decided to contact Lively, whom he knew personally. Lively proceeded to alert the state and other Witlamette Valley communities, urging them to send information to the company.

Rohr narrowed its focus first to about 50 communities and then, by August, to 10, including Eugene and McMinnville, which came close to meeting specific siting criteria developed by the company, Wilson said in a phone interview. The company was impressed by the quality of training programs being offered by both communities, he said.

Wilson, accompanied by individuals he identified as his assistants, began visiting possible sites in the two cities. Local officials later learned that Wilson's "assistants" actually worked for Rohr but did not want to disclose their identities because they thought it might enable officials here to figure out for whom they worked.

At first glance, the Rohr siting team rejected Eugene-Springfield, contending the community was too large and that all of the area's prime industrial sites had "major problems," said Jon Jaqua, a state regional business development officer based in Eugene who also was working with the company on siting the plant.

Rohr chose McMinnville as the preferred location of the new plant, he said. That city soon was dropped from consideration, however, after Rohr learned that McMinnville has not a state enterprise zone, which can provide new or expanding companies a three-year property tax break, Jaqua said.

"Rohr indicated the presence of an enterprise zone was a deal-maker for them," City Manager Mike Gleason told the Eugene City Council in a January memorandum.

The owner of Rohr's chosen site in McMinnville presented another problem, refusing to sell without being told the name of the company with whom he was dealing, Jaqua said. Rohr's board of directors refused to permit the disclosure, he said.

"My reaction was, Jesus! We're going to lose them out of this state," he said.

At Lively's urging, the company returned to Eugene to take a look at the Awbrey-Meadowview site, located just east of Mahlon Steet Airport. Long zoned for agricultural use, the parcel only recently has been brought within Eugene's urban growth boundary as the first step toward converting the land to a potential industrial site.

The site is located just outside the west Eugene enterprise zone. The boundaries could have been changed, though, to include the site.

In early October, the Rohr team told Eugene officials the plant would be built on the Awbrey-Meadowview site, if the community could meet a tight timeline that called for ground-breaking by spring and the opening of the plant by fall.

With a huge backlog of orders, "their major concern, as it turned out, was being able to oopen their doors by fall," said Beyer, Eugene's industrial adviser.

State and city officials knew by that time, based on the company's stated employee training needs, that they had bagged not only a high tech manufacturer, but an aerospace firm. The only question was which one.

"Everyone was guessing around that it was McDonnell Douglas to Lockheed," Beyer said. "No one guessed that it was Boeing, because Boeing had never shown any interest at all in this area."

With the clock ticking, Lively began drawing charts identifying the many issues to be worked out and setting deadlines for each to be accomplished. Annex the site. Negotiate an electric rate. Test the soil. Survey the land. Obtain a partition.

Something else was ticking. Eugene's and Lane County's nuclear free zones were not on the charts, igniting the time bomb that would explode four months later when news of the proposed plant became public.

"There were a hundred different issues that we were dealing with," Lively said. "Any one of those could have killed the project. And so what we were doing was taking them one at a time."

Another obstacle appeared long before the nuclear free zone issue. The city had assured Rohr that the Awbrey-Meadowview site was free of wetlands, which fall under strict federal regulations, only to learn in October that much of the site was indeed wetlands under a new federal definition.

That discovery launched a full-time effort to reassure Rohr officials that Eugene hadn't tried to pull something over on them and to put together a mitigation plan that would allow development on the site, Lively said.

With Gov. Neil Goldschmidt personally backing the project, the state soon stepped up and offered to pay the cost of wetlands mitigation. Work began on a wetlands replacement proposal. The project was back on track, Lively said.

The second crisis was touched off by Rohr in late November after the company had hired the plant manager for the new Eugene factory, Jaqua said.

"He came through Eugene secretly and didn't like it." He didn't like the site, the site plan and even the type of housing available in the city, Jaqua said.

"That all of a sudden brought everything to a screeching halt," Jaqua said.

In late November or early December, Lively and Jaqua walked the property with the plant manager to discuss his concerns. "He came on board at that time, is my feeling," Jaqua said.

In the meantime, work on the wetlands mitigation, which depended on the site plan, was stalled. "And that was a company-caused problem," because of the need to back up and address the concerns of the new plant manager, he said.

The third crisis point, as far as officials involved were concerned, was a couple of weeks later, when they learned that What's Happening, a Eugene weekly newspaper, was about to expose details of the proposed development, including the identity of the company.

Lively said he considered the timing of the announcement premature because there was nothing "signed, sealed and delivered." But he nonetheless called the company with a recommendation to hold a news conference to "be out in front" of the What's Happening article.

"Their first reaction was not to do anything - to deny it, because they weren't ready to announce it," Lively said. He said he advised the company that stonewalling wasn't the best approach. "I knew the less we said, the more doubt we were going to plant in people's mind."

The company relented and the news conference was scheduled for Jan. 3. "Fifteen minutes before the press conference, we were still faxing things back and forth with the company, trying to get their approval of what we could say," Lively said.

The news conference turned out to be the turning point in negotiations with Rohr, local economic development officials said. The conference provided a forum for reporters to question whether Rohr's proposed manufacturing operation would conflict with Eugene's nuclear free zone ordinance.

The ordinance forbids production or storage of nuclear warheads and their components in the city.

Mayor Jeff Miller and Rohr spokesman Dick Dalton said later that day that the issue had been looked into and that attorneys concluded the military portion of Rohr's business wouldn't violate the current city ordinance.

Not addressed, however, was whether Rohr would comply with a tougher version of the city's nuclear free zone that appears on the May ballot and with a strong Lane County nuclear free zone, the existence of which had been all but forgotten during years of debate on the Eugene measure.

Both the revised city version and the county version ban not only nuclear weapons but also delivery systems and their components. Rohr makes parts for the Navy's F-14 fighter, which normally is armed with conventional weapons but can be armed with a nuclear missile.

In retrospect, there is much disagreement on what Rohr knew about Eugene's nuclear free zones, and when the company knew it.

"It's my view that that (nuclear free zone issue) was consciously withheld from me and my clients. All along. Up until the very end," said Wilson, Rohr's siting consultant.

"It's probably something that I should have known, as a site location professional, or I should have ferreted it out. I think that was probably viewed as a wart that we shouldn't see," he said.

Jaqua, however, insists that "Firebird" was told about Eugene's existing nuclear free zone early on. He described a meeting in October at which the company's representatives were handed a copy of the law, warned about the "capability of the community to oppose military industry" and asked whether they made anything that might be in conflict with the ordinance.

Wilson said he doesn't remember such a meeting but respects both Jaqua and Lively. "If Jon Jaqua or John Lively said that anything was true, I would not say it's not true," he said.

Jaqua said that with the identity of the company still unknown and given the company's assurances that the nuclear free zone would not be a problem, "no red flag rose" to cause anyone to want to spend more time on the issue.

He admits the company was not given a copy of the version of the nuclear free zone on the May ballot or of the county ordinance until late in the process. In hindsight, he said, he now plans to provide such documents to any company interested in locating here that could conceivably fall under the laws.

Shortly after the news conference and follow-up articles in The Register-Guard quoting proponets of the tougher version of the Eugene's nuclear free zone, Rohr officials told a local surveyor working on the project to "put it on hold," said Jim Saul, owner of Saul & Associates in Eugene and a real estate consultant for owners of the Awbrey-Meadowview site.

Wilson, who local officials believe was one of the leading advocates on Eugene's behalf all along, still maintains that Rohr wouldn't have violated any of the nuclear free zone measures because the company doesn't make any nuclear components. That meshed with the opinion given by Steve Johnson, chief petitioner for the Committee to Keep Eugene Nuclear Free.

"I believe that Rohr could probably have made a go of it in Eugene," Wilson said.

But he said he also understands the reasons why Rohr's top management recommended to its board of directors that the company pull out of Eugene.

"Who knows what might come out of the woodwork next? They knew that they had to break dirt at a certain point in time," he said.

"They're in the business to deliver high-tech components to their customers, not to be the subject of a media campaign with the word 'nuclear' in it all the time."

News of Rohr's decision not to build in Eugene appeared in the Wall Street Journal and was sent out over Reuter's, the British news service with international and U.S. clients.

One week later, Rohr announced it would build the plant in San Marcos, Texas, next to a site where Rohr and General Electric in January opened a joint venture factory for manufacturing advanced composite technology engine components.

In exchange for the San Marcos offer to waive about $209,000 in property taxes over the next five years, Rohr has agreed to create a total of 468 jobs at the new plant by December 1994.

Given the outcome, the code name "Firebird" may have been appropriate. According to the Russian legend, the firebird continually consumes itself in its own flames, turning to ash. But the firebird always rises again.

And so it has. This time, in San Marcos.

SOURCE: Rohr officials, state and local officials, public records and The Register-Guard
GRAPHIC: The Register-Guard