Computer chip site could cement Ohio’s status as a manufacturing hub

A massive Intel computer chip factory would be a major victory in Ohio’s efforts to resurrect its status as a national and global manufacturing hub.

“This is a unique opportunity for Ohio,” said Ryan Augsburger, president of the Ohio Manufacturers’ Association.

It looks like when Maryville landed Honda four decades ago, which Governor James A. Rhodes said was one of his greatest accomplishments as governor.

What makes the Licking County area a good location for the Intel factory?

In many ways, Intel’s selection of the Licking County site highlights the state’s strengths during a pandemic that has exposed supply chain weaknesses that have troubled everything from automakers to chains. grocery stores.

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Greater Columbus is within a day’s drive of 46% of America’s manufacturing industry, said Keely Croxton, a logistics professor at Ohio State University. And that makes sense for a factory that makes semiconductors since there are automotive manufacturing facilities in Ohio, Michigan, Kentucky, and Indiana.

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“A chip is a small component in what makes a car, but it’s the one everyone is talking about,” Croxton said. “I think there are a lot of logical reasons why central Ohio, Ohio State, is a good location.”

When a big company chooses a place like Ohio, it leads people to think of Ohio as a manufacturing hub, she said. They’re not just thinking of Silicon Valley, she said, but also of Ohio as a place for tech companies to invest.

“This is about relocating an entire industry that we almost lost that supports everything we make in this state, from washers and dryers to cars,” Lieutenant Governor Jon Husted said.

And recent events of the pandemic have highlighted existing issues in our supply chain, particularly when production is sourced overseas, Croxton said. “Especially with semiconductors, it’s a national security issue,” she said.

“The pandemic has presented the greatest opportunity for American manufacturers in the past half-century by highlighting our country’s overreliance on foreign products. Strategic investments in targeted sectors – including manufacturing semiconductors – are a matter of national security,” Augsburger said.

“While investment in facilities is essential, equal importance must be given to the skills of the workforce and the available workforce. Fortunately, Ohio also has a head start in this area, including a statewide network of industry partnerships and state support for industry-recognized credentials. .

Edward “Ned” Hill, professor of economics at Ohio State University, said Intel’s move shows the company believes Greater Columbus can attract the technical talent it seeks. “Schools across Ohio can produce the talent they need on an ongoing basis,” he said.

Despite decades of plant closures and job losses that have hurt Ohio communities large and small, manufacturing remains a vital part of the state’s economy.

In fact, the value of the state’s manufacturing output has never been higher, said Jamie Karl, general manager of communications services for the Manufacturers’ Association.

According to the U.S. Bureau of Economic Analysis, Ohio’s manufacturing gross domestic product was over $118.3 billion (annualized) in the third quarter of 2021, a record high, up from $116.9 billion. billion in the second quarter and $112.4 billion in the fourth quarter of 2019. , before the start of the pandemic.

Karl said 670,000 workers are currently employed in Ohio’s manufacturing sector. This is 30,000 less than before the arrival of the COVID-19 pandemic in March 2020.

“You’d think that’s a misrepresentation of the industry,” Karl said. But that’s not the case, he says.

“The job offers are out there. The applicants aren’t,” he said.

These numbers are still well below what they were decades ago. Manufacturing employment in Ohio peaked in 1969, at 1.48 million.

Greater Columbus manufacturing employment was 120,660 in 1973, Hill said. By 2020, the number had fallen to 73,908.

Zach Schiller, research director at Policy Matters Ohio, left, said while Ohio ranks third in manufacturing employment in the United States, behind only California and Texas, it doesn’t even yet to regain the jobs it lost during the pandemic, let alone the tens of thousands lost before that.

“We had a million manufacturing jobs 20 years ago,” Schiller said. Having a strong manufacturing sector remains a valid goal for the state, he said.

“Let us experience a more substantial renewal,” he said.

Other Large Scale Manufacturing Projects in Ohio

But Augsburger said “Ohio has been and will continue to be a manufacturing state.”

Other recent large-scale manufacturing projects in Ohio include:

  • Exercise equipment maker Peloton said it would create 2,174 jobs as part of a $400 million facility in Wood County south of Toledo to make bikes and treadmills from 2023.
  • Steelmaker Cleveland-Cliffs has invested $1 billion in its hot briquetted iron plant in Toledo. This was completed in 2020.
  • Cleveland-based paint maker Sherwin Williams is building a 36-story corporate headquarters tower in that city’s public square.
  • Biotech company Amgen opened a $365 million pharmaceutical packaging facility near Beech Road and Route 161 in New Albany in late 2021. It will employ 400 people.
  • American Nitrile is spending more than $100 million to convert a warehouse in Grove City into a facility to manufacture latex-free gloves for healthcare workers and others.
  • SK Food Group announced in November that it was planning a second food plant in the Columbus area on the Far West Side that will employ more than 300 workers.
  • Jackson Center travel trailer manufacturer Airstream recently opened its largest expansion in its history.

The semiconductor plant adds to that manufacturing legacy, Governor Mike DeWine said.

“It’s a huge signal to the country and the world about what’s happening in Ohio today,” DeWine told The Dispatch this month. “We remain a manufacturing state and we look to the future.”

That much of the chip production has been shipped overseas is a national security issue that needs to be addressed, DeWine said.

“I’m very proud that Ohio is part of the solution,” he said.

According to the National Association of Manufacturers, Ohio growers account for 16% of the state’s total economic output, employing 12.74% of the workforce. The average annual compensation was $78,108 in 2019.

In 2020, Ohio manufacturers exported $40.5 billion worth of goods. This accounted for 90% of all goods exported from the state.

Hill said the production of durable goods — of which computer chips are a part — accounts for 6.9% of the national gross domestic product but 9.4% of Ohio’s.

“We’re right in the middle of the durable goods manufacturing belt,” Hill said, including aircraft components and appliances.

Alison Goebel, executive director of the Greater Ohio Policy Center, a nonprofit group that pushes for urban revitalization in the state, said the state has a long history of manufacturing and innovation, so that doesn’t surprise her. not that Ohio is a strong contender for the computer chip site.

“We have the history and the know-how to make things here,” Goebel said.

“It definitely benefits from the location,” she said, including the extensive network of interstate highways, railroads and proximity to deep-sea ports. “It all makes sense. »

Also, extreme weather events are not as dramatic as in other parts of the country, she said.

Columbus also has cheaper electricity prices than a state like New York, where Intel said it considered building in Albany. Hill also said access to water was important, and for that reason asked why Intel was building two new chip factories in Arizona..

Business reporters Mark Williams and Jim Weiker contributed to this story.

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@MarkFerenchik