RIO RANCHO — Gov. Bill Richardson and his top economic development adviser were all smiles Thursday as the world’s largest PC maker, Hewlett Packard, announced up to 1,300 new jobs at a soon-to-be-built plant in the state’s fastest-growing community — Rio Rancho.

But the two weren’t so eager to talk about the previous day’s announcement, the one that could mean 1,500 to 2,000 fewer jobs for New Mexico than expected.

The potential for fewer-than-expected new jobs became a potential concern when Boeing scored a major victory Wednesday in its battle to wrestle back a $35 billion Air Force contract from Northrop Grumman and its partner, European Aeronautic Defence and Space Co., the parent of Airbus.

New Mexico would gain many more jobs — direct and indirect — with the Northrop bid than under Boeing, New Mexico’s economic development secretary Fred Mondragon said. But in the next breath he chose to take a glass-is-half-full outlook.

"It looked like we were going to have 4,000 jobs with Northrup Grumman bid and probably (2,000) to 2,500 under the other bid," Mondragon said Thursday. "But again either one will bring us more jobs."

Richardson, recently returned from a barnstorming tour of Europe and the Middle East, pleaded ignorance about the development.

"Did that happen?" Richardson asked of Boeing’s victory. 

It has been called a war between dueling aeronautical giants — Boeing and EADS — one that has featured protectionist arguments from Boeing supporters as well as has pit officials from various states against one another. Some states benefit more from one bid or the other.

Northrop Grumman and EADS surprised industry and elected officials in February when the Air Force won the contract over Boeing, which had been supplying refueling tankers to the Air Force for nearly 50 years and had been widely expected to hang onto that monopoly.

But the Government Accountability Office, the investigative arm of Congress, upheld Boeing’s protest of the refueling tanker contract this week and recommended the service hold a new competition.

The congressional watchdog said it found "a number of significant errors" in the Air Force’s February decision, including its failure to fairly judge the relative merits of each proposal.

While the GAO decision is not binding, it puts tremendous pressure on the Air Force to reopen the contract and could pave the way for Boeing to capture part or all of the award from Northrop and Airbus parent European Aeronautic Defence and Space Co.

And it gives ammunition to Boeing supporters in Congress who have been seeking to block funding for the deal or force a new competition.

 

The decision also is a setback for Sen. John McCain, the Republican presidential nominee in waiting, who was instrumental in the Pentagon’s long attempt to complete a deal on the tanker.

The Air Force will determine its next steps after completing a review of the GAO ruling within 60 days. The service will select the "best value tanker for our nation’s defense, while being good stewards of the taxpayer dollar," said Air Force Assistant Secretary Sue C. Payton.

 
While the potential for fewer jobs is real, state officials had a decidedly celebratory take on the HP news. The world’s largest PC maker, Hewlett-Packard Co., will open a customer service and technical support center in New Mexico that’s expected to employ 1,300 people by 2012. 

The center is to open in Rio Rancho in mid-2009 and initially will have several hundred workers. The payroll ultimately could reach $50-$60 million a year. 

The economic development project was announced Thursday by Gov. Bill Richardson and Jon Flaxman, HP executive vice president and chief administrative officer. 

The state will provide tax breaks and other financial incentives to HP for locating the plant in New Mexico. 

The company could receive as much as $8 million to $10 million in state subsidies for training workers and more than $20 million in state tax credits for creating high-wage jobs, according to Mondragon. The governor also will ask the Legislature to provide $12 million in capital improvement financing for the project. The majority of that capital outlay money will go toward constructing the building, Flaxman said.

HP also plans to open a similar customer service and technical support center in Conway, Ark. 

 

Associated Press contributed to this report.