MOBILE, Ala. - German steelmaker ThyssenKrupp AG said yesterday that it would build a $4.19 billion steel plant in Alabama in a project that could create thousands of jobs. Louisiana was the other finalist, and both states offered millions of dollars in tax breaks and other incentives to get the plant.

Alabama Gov. Bob Riley celebrated the decision, saying a "project this size, with this amount of economic impact, comes along perhaps once in a generation."

But a steelworkers union official said the plant could hurt the industry.

"This project will only eat up U.S. tax dollars and add unneeded domestic capacity," United Steelworkers International vice president Tom Conway said in Pittsburgh. "The last thing our industry needs is another mechanism to depress steel prices."

The plant, set to open in 2010, would employ as many as 2,700 workers when fully operational, and create as many as 38,000 related jobs ranging from suppliers to transportation to dining and entertainment, the company said.

It will be built along the Tombigbee River, a site about 25 miles north of Mobile that offers a river route to the Gulf of Mexico and is near rails and interstate highways.

The steel company was lured by tax breaks and a $400 million incentives package approved by the state legislature. Alabama's proposal also was endorsed by governors and U.S. senators in neighboring Mississippi and Florida, with potential workers living near the plant site.

The plant would be ThyssenKrupp's first steelmaking operation in the United States.

It would be "an integral part of the company's plan to increase growth in the steel and stainless-steel division in North America and Europe," supervisory board chairman Ekkehard Schulz said in a statement.

Initially, the company had said the project would run some $2.9 billion, but raised the amount because "higher capacities and extended plant configurations were shown to be feasible and economic."