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Buckeye State Comeback, 2003 Governor’s Cup, Site Selection Magazine, March 2004

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conomic development officials in Ohio are hoping their capture of the 2003 Governor’s Cup is the beginning of a repeat of the state’s three-year claim to the prize 10 years ago. In 1993 and for the next two years, Ohio won Site Selection‘s highly coveted Governor’s Cup, which recognizes the state in which the most new or expanded plant activity took place according to the magazine’s proprietary New Plant database. Publisher Conway Data, Inc., has been tracking business expansion activity globally for 40 years and has been honoring states for their success in attracting capital investment with the Governor’s Cup since 1989.

        “It is a battle for survival out there, and we have to be very aggressive to attract the kind of investment we need to grow our economy,” says Gov. Bob Taft.

        Several factors contributed to Ohio’s strong performance in 2003, notes the governor. These include its central location, which attracts manufacturing and distribution investment; strong investment on the part of domestic and foreign-owned companies (more than 900 of the latter have a presence in the state, 60 of which announced projects in 2003 worth US$800 million); and sharp economic development tools, ranging from tax incentives to a low-interest financing program to work-force training programs.

        “When I took office, we significantly expanded our investment in work-force development and training, because to compete in the U.S., companies have to become more productive, meaning they have to upgrade the skills of their workers,” says Gov. Taft. “So we increased the amount of money we sent to our community and two-year colleges to do customized, job-specific training. Overall, we invest about $1 billion a year to educate, train and certify Ohio’s work force.”

        Ohio’s strong standing as an export state – it’s the 6th largest in the U.S. – is another lure for investment, as is its competitive business climate. Ohio ranked 4th in Site Selection‘s 2003 state business climate ranking (see the November 2003 issue). “In the good years of the stock market, we cut our workers’ compensation costs, and we have held them very stable since then, which has definitely been an asset,” says Gov. Taft.

Industrial Strength

In keeping with industrial capital investment trends nationally, the transportation equipment manufacturing sector was the most active in the Buckeye State in 2003, which has been the case for the past several years. Among the companies investing in Ohio in this sector were Honda of America in Marysville and Russells Point; Ford Motor Co. in Lima, Sharonville and Walton Hills; Lear Corp. in Zanesville; Delphi Corp. in Dayton and General Motors in Moraine and Mansfield. Ford’s $335-million Lima project – built around a new, 3.5-liter, V-6 engine – retains 780 jobs.

        Other significant investments contributed to Ohio’s capture of the Governor’s Cup. Ben Venue Laboratories, a division of Boehringer-Ingelheim, is investing $84 million in a pharmaceutical facility in Bedford. Convergys Corp. announced a $105-million expansion in Cincinnati that will create 195 new jobs and retain 1,700. And Toledo-based Libbey, Inc., a manufacturer of glass tableware, is investing $61 million in its plant in Toledo.

Investment in the Future

No less important is the state’s investment in the so-called knowledge economy, stresses Gov. Taft.

        “Our Third Frontier project is focused on such areas as biomedical research; power and propulsion, including fuel cell technology; information technology; and instruments, systems and controls used in the manufacturing process,” he says.

        The Third Frontier initiative makes more than $1 billion available to such industry sectors over 10 years. Business and university partnerships are central to cultivating the innovation needed to drive investment. “We have some real strengths we can build on in the healthcare sector with our research universities and biomedical research facilities, and the same is true in the other industries I mentioned.”

        The new year is already off to a strong start for Ohio. USEC, Inc., announced on Jan. 12th a $1-billion investment in a centrifuge plant that will be located at the former Portsmouth Gaseous Diffusion Plant in Piketon. The project will create 500 full-time jobs.

        Ohio competed aggressively with Kentucky for the project, amending legislation to expand portions of the Job Creation Tax Credit and Enterprise Zone programs.

        “We were fortunate to have had the option of two first class sites and work forces in Piketon and Paducah,” noted William Timbers, USEC’s CEO when announcing the project. “The Ohio proposal offered the right mix of economic benefits, existing infrastructure, assurances concerning seismic conditions and schedule advantage for this important new facility.”

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