Springs loses bid for HP hub

California-based Hewlett-Packard Co., a cornerstone of the Colorado Springs business community and high-tech industry for more than 40 years, announced Thursday it will open customer service and technical support centers in Arkansas and New Mexico, leaving local officials worried that HP jobs in the Springs will be in jeopardy.

The effect, if any, on Colorado Springs "hasn't been determined because details on staffing of the new centers are still being developed," said company spokesman Dave Berman. The centers, which will open next year in Conway, Ark., and Rio Rancho, N.M., and will employ a total of 2,500 by 2012, are "additions to the operations we already have worldwide," he said.

HP employs about 1,800 in Colorado Springs, along with up to 700 contractors. Of the 1,800, about 800 work in a technical and customer support call center; HP also operates a data center for DirecTV and other clients. In the past, HP's local operations have included a major research and development hub for storage operations and a financial operations center. HP also has an operation in Fort Collins.

Colorado Springs Mayor Lionel Rivera said an HP official called him about 10:30 a.m. Thursday to tell him that the city, which was on a short list of five to six communities under consideration for one of the new centers, wasn't chosen.

The HP official told Rivera there would be no effect on HP's business operations in Colorado Springs or Fort Collins.

"I wasn't told there would be a loss of jobs," Rivera said. "But if a company is going to build a new facility (in New Mexico and Arkansas), and they're doing it for consolidation, of course I have my concerns."

Mike Kazmierski, president of the Colorado Springs Economic Development Corp., said the EDC has received indications from HP employees that there may, indeed, be an effect in the Springs. Kazmierski wouldn't be specific about the workers' concerns.

Berman declined to respond to Rivera and Kazmierski's remarks.

"There are internal discussions that are going on," Berman said. "Because they are internal, we're not going to discuss them." He also declined to comment on whether there's a timetable for decisions.

Rivera and Kazmierski said HP officials have agreed to come to the Springs and meet with local officials in the next few weeks to discuss the company's future here.

Incentives were a factor in selecting the Arkansas and New Mexico locations, but their local work forces, quality of life, educational systems and business climates also were important, Berman said.

Both states opened up their wallets to the tune of tens of millions of dollars.

In Arkansas, the city of Conway's development arm will provide a $28 million, 150,000-square-foot building for the company to lease and $2.2 million in site improvements to go with an earlier $5 million contribution, according to an Associated Press story. Also, the state will kick in $10 million for public improvements, while HP also will be eligible for performancebased incentives that would provide tax credits.

New Mexico state officials, according to the AP, said HP will qualify for tax and job-training incentives worth more than $30 million. Gov. Bill Richardson also will ask state legislators to provide $12 million in capital improvement financing.

Rivera declined to say what Colorado Springs, the EDC and the state of Colorado had offered as incentives, other than to say he suspects they were outgunned.

Colorado doesn't compete well on incentives, Kazmierski said.

The Springs struck a $53 million deal in March to keep the U.S. Olympic Committee headquarters in Colorado, with the city chipping in about $27 million, a private developer contributing about $25 million and the state putting in $500,000.

The USOC retention effort was not as much about keeping jobs as it was branding the community as the amateur sports capital of the U.S., Kazmierski said.

"There is no doubt we have lost quality prospects in the last 18 months solely because other states have provided more aggressive incentives," Kazmierski said. The EDC is researching how many potential jobs and companies have gone elsewhere as a result of more generous incentive packages, he said.

David White, the EDC's executive vice president of marketing, said the private, nonprofit group spent more than a year "on and off " courting HP to expand its Springs call center.

If HP cuts back or closes its Springs call center, the loss would come on top of Intel Corp.'s shutdown of its local semiconductor manufacturing plant last year, which resulted in layoffis of 750 of the plant's 1,000 workers. This year, more than 400 people have lost jobs at local call centers.

Even if HP cuts back in the Springs, Kazmierski said EDC is "proud of HP as an important employer and corporate citizen. We look forward to continuing our relationship with HP for many years to come."

HP's history in the Springs dates to 1961, when Pueblo native David Packard selected Colorado Springs as the site for a new division. He also played a key role in starting the University of Colorado at Colorado Springs to train the company's engineers.

The operation grew to more than 2,700 in the 1980s and eventually was spun offi in what is now Agilent Technologies Inc. HP acquired its current local operations in its 2002 takeover of Compaq Computer Corp.

Those operations date to the late 1970s and were built by Digital Equipment Corp., which was bought by Compaq in the late 1990s.