Northwest Ohio's Advantages as a Manufacturing Location
I was recently provided the opportunity to tour manufacturing plants in the Toledo, Ohio region by the Regional Growth Partnership (RGP), a privately held economic development corporation. Coming from drought-stricken San Diego where everything is brown to the lush green of Toledo was like being in paradise. I was even more impressed by the diversity and use of advanced technology, automation, and robots at the companies we visited. These were no "rust belt" companies.
John Gibney, vice president, Communications and Marketing, of RGP, was our tour host for the five plant visits we did over a two-day period. As a 100%, privately funded economic development organization, the Regional Growth Partnership can operate beyond political boundaries. Investors include major corporations in the region, banks, utilities, universities and service providers such as law, finance and insurance firms. The RGP offers a full range of traditional business development services, working in collaboration with its partners across the region to expedite and simplify the site selection process.
RGP’s vision is that "Northwest Ohio and the adjoining Michigan region will be a premier global location for business and a leader in knowledge-based economic growth." Their mission to achieve this vision is that "We will be the primary, private sector contributor to a collaborative regional economic development enterprise driving growth in jobs, capital investment, and wealth to Northwest Ohio and Southeast Michigan."
RGP serves as Northwest Ohio’s network partner for JobsOhio, "a private, nonprofit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts." The RGP is one of the six regional economic development partners of JobsOhio, known collectively as the JobsOhio Network. The network "provides the necessary connectivity to achieve a One Firm, One State approach to selling Ohio."
I asked John if the region had lost any major companies or divisions during the depth of the recession, and he responded, "No, we did not lose any corporations. We had cutbacks and layoffs during the depth of the recession, but no actual company relocations." He added, "We had a peak unemployment rate of 13.8% in June 2009 for the Toledo Metropolitan Area, but it dropped down to 4.8% by May 2015.“
I also asked John what has been their biggest success story of recruiting a company to locate in their region, and he replied, "Brazilian firm Valfilm North America purchased the former Dow Chemical Co. plant in Findlay, saving the 55 employees left over from Dow. The company expects to add an additional 80 jobs with capital investment in excess of $13 million. Findlay beat out sites in South Carolina and Texas in a competitive search process."
In data provided by RGP, I noted that out of a total workforce of 635,057 in the 17-county Northwest Ohio region, there are 172,805 employed in manufacturing. I calculated that 24.8% of the workforce have associate, bachelor or graduate degrees, and 63.7% are between the ages of 25-54, so it is a younger workforce that most regions.
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As a director on the board of the San Diego Inventors Forum, I was most interested in the fact that "the RGP created Rocket Ventures, a business assistance and pre-seed venture capital organization that operates in an 18-county area of Northwest Ohio. Rocket Ventures’s mission is to prepare technology-based start-up companies for funding and sustainability by providing intensive business assistance, enhanced management services and pre-seed investments. Its vision is to create high-tech, high-wage jobs and to generate wealth in Northwest Ohio. Eligible clients of the organization possess significant intellectual property for revolutionary technologies." I know how important it is for startup ventures to be able to get the investors they need to go complete their product development process and get their product successfully launched in the marketplace.
The Regional Growth Partnership’s business development efforts are focused on six primary cluster industries:
- Advanced & Alternative Energy
- Advanced Materials & Manufacturing Technologies
- Automotive
- Bioscience
- Food Processing & Agribusiness
- Transportation & Integrated Logistics
Toledo and Northwest Ohio have been called the “Solar Valley" because of having nearly 2,000 people working in industries related to photovoltaic development. "Moving forward, Toledo and Northwest Ohio are uniquely positioned for success in the solar industry due to a manufacturing and glass-making heritage, world-class research and educational facilities, thin film next-generation photovoltaic expertise and supply chain resources and logistics. In addition, the State of Ohio in 2010 designated Northwest Ohio as a Solar Hub of Innovation."
Two of the companies we visited are in the Advanced and Alternative Energy industry cluster and one was in the automotive cluster.
The first company we visited on our tour was First Solar, Inc., the largest solar assembly plant in North America; the overall company is the world's largest manufacturer of thin film Cadmium-Telluride (CdTe) photovoltaic modules. Founded in 1999, First Solar was the first solar company to produce 1GW in a single year, break the $1/watt manufacturing cost barrier, and implement a global PV module-recycling program. While the company headquarters is in Tempe, Ariz., the U. S. manufacturing plant is located in Perrysburg, a suburb of Toledo, to be in close proximity to the glass technology that is centered in the Northwest Ohio area. They have installed 10GW worldwide and have 3GW in their contract pipeline. After watching a video about the company, Mike Koralewski, senior. vice president, Module Manufacturing, Jim Koedam, plant manager, and Jay Lake, manager, Manufacturing Training, gave us a tour of the main manufacturing building at the Perrysburg site that houses four production lines making their solar panels. The campus includes over 1 million square feet of floor space and they are converting a warehouse to another production building. They have about 1,300 employees in Perrysburg. They also have six manufacturing plants in Malaysia.
We next visited the Rossford plant of Pilkington North America, Pilkington is part of the NSG Group, one of the world’s largest manufacturers of glass and glazing products for the architectural, automotive industry and technical glass sectors. Founded in 1918, the company was transformed in 2006 with the acquisition of Pilkington plc, itself a global leader in the glass industry and the inventor of the Float Glass process. The Pilkington name was retained as a brand for the Group’s architectural and automotive products.
Pilkington North America has five float glass lines in the U.S. ─ Rossford, Ohio (2); Laurinburg, North Carolina (2); and Ottawa, Illinois (1). The company has approximately 4,700 employees in North America. The Rossford plant makes float glass for the automotive market and also fabricates glass for specialty transport vehicles, such as farm equipment.
Vice President of Sales and Marketing Stephen Weidner conducted the tour for us and told us that the Rossford plant has about 2.5 million square feet of floor space and the glass float production line is as long as a football field. At the beginning of the line, the furnace melts the pure silica in the form of sand, limestone and other ingredients into a liquid at 2,900o C, which is cooled down to 1,050o C as it floats over the liquid tin and then further cooled down to about 200o C by the end of the line, where robots handle the glass until it is scored and broken into the right size for the end product, stacked into "books" of glass, and cooled enough for human handling. This production line was truly an amazing sight to a person who is fascinated by all types of manufacturing processes.
We next visited the General Motors Powertrain plant in Toledo where six- and eight-speed transmissions are manufactured. Plant Manager Joseph Choate gave us an overview of the division and a plant tour of both the six- and eight-speed transmission production lines. This plant has about 2 million square feet of floor space and about 2,000 employees (1,844 hourly and 184 salaried). One interesting note is that he showed us a picture of the solar panels, providing 10% of their power, on a portion of the roof of the building supplied by First Solar.
As a sales rep who has sold every kind of metal casting processing, I have never seen such complex, intricate die castings as those supplied to GM. I was also impressed with the integration of robotics and automation with the human production line workers, which essentially made their jobs easier to perform, ergonomically safer, and more varied because every worker is cross-trained for every job on the transmission lines. By the end of these three tours, I felt I had walked five miles.
We ended the day by meeting Paul Toth, Jr., president and CEO of the Toledo/Lucas County Port Authority, at the site of the development of the Overland Business Park, an 80-acre site being redeveloped. He told us that it was originally the site of the Willys-Overland plant that converted from bicycle to automotive manufacturing in 1910 and produced the Jeep brand products from the 1940s through 1987, when it was purchased by Chrysler. He said, "The Port Authority purchased the property in 2010 from Chrysler during their bankruptcy reorganization and has razed the plant, except for one of the brick smokestacks."
Extensive grading is being done to level the land to provide easier access to the nearby I-75 interchange and two active Class 1 rail lines. We saw the first of several planned Class 1 spec buildings that is nearly finished. What was very interesting to me is that the Toledo Port Authority's jurisdiction is not limited to land adjacent to Lake Erie or the two tributary rivers as the San Diego Port Authority's jurisdiction is limited to land adjacent to the San Diego harbor. The Port Authority operates the Port of Toledo, Toledo Express Airport and Toledo Executive Airport, also known as Metcalf Field, and acquired Central Union Terminal from Conrail in 1994, which was rededicated in 1996 after a $3.1 million renovation.
In addition, the Port Authority entered the business finance arena in 1988 and has assisted in financing close to 300 economic development projects representing a total investment of more than $1 billion while helping to create and retain more than 15,000 jobs. The Toledo-Lucas County Port Authority operates the Northwest Ohio Bond Fund.
On day two, we first visited Plastic Technologies, Inc. (PTI), located in Holland, where Chairman and founder Thomas Brady, Ph.D., and President and COO Scott Steele gave us a thorough company overview and tour of their facility. PTI is the leading industrial source for preform and package design, package development, rapid prototyping, pre-production and material evaluation engineering of PET bottles and containers. PTI manufacturing capabilities include injection molding of preforms and blow molding utilizing these injection molded performs. I have seen the extrusion type of blow molding being done here in San Diego, but had never seen blow molding using injection molded preforms, which is a much faster process.
We concluded our day with a visit to Surface Combustion, which is celebrating its 100th anniversary this year. Dan Goodman, vice president, Sales & Marketing, said that Surface Combustion was founded in Bronx, N.Y., in 1915 to utilize patents covering a heating concept called "surface combustion." The company relocated to Toledo in 1924 to serve the growing Midwest industrial base and Toledo glass industry. Surface Combustion has used its technology to design and build a diverse array of thermal systems (furnaces) and equipment, such as atmosphere and vacuum furnaces, atmosphere gas generator equipment, and steel mill equipment. It became a family-owned business when William Bernard, Jr. became the majority owner and president in 1998. The 66,000-square-foot plant has four manufacturing bays capable of assembling equipment that could be as tall as 25 feet and as long as 35 feet in the highest bay, utilizing their 20-ton overhead crane.
There is interconnectedness between four of the five companies we toured. NSG Pilkington makes the glass that First Solar uses to manufacture their solar panels GM Powertrain has First Solar panels installed on its building. GM Powertrain either directly or indirectly uses heat-treating equipment produced by Surface Combustion. The common reason why all these companies are located in the Toledo region is abundant natural gas as an energy source. The Northwest Ohio region offers some of the lowest industrial electric rates in the Midwest (4.73 cents per kilowatt-hour for industrial electricity).
A trained, educated workforce is another advantage of the region served by the Regional Growth Partnership. In addition, recent tax reforms in Ohio have reduced the tax burden by up to 63%. Toledo is located within a day's drive of nearly half the U. S. and Canadian industrial markets representing nearly 100 million people, according to data from the port authority. All of these factors add up to making the Northwest Ohio region an attractive manufacturing location.
However, I can't say it better than what President and CEO Dean Monske said at our dinner, "I am born and raised in the Toledo area but I have traveled the world extensively and gotten the opportunity to witness and experience a wide range of diverse economies. For me, I still come back to Toledo as the perfect place to build your business and love your life. So, yes, I am a passionate champion of this region. But for the Regional Growth Partnership, our biggest cheerleaders in selling Northwest Ohio are the corporate leaders who have lived around the world and chosen this area to live and raise their families. They are our greatest advocates."
