MANSFIELD — Tim Bowersock knows Intel’s move into New Albany will send seismic economic waves across central Ohio.
The question, according to the City of Mansfield’s economic director and other local experts, is how far out those waves will ripple in terms of impact.
Intel, a California-based semiconductor chip manufacturing company, plans to invest an initial $20 billion in the project – with the potential for up to eight more factories and $100 billion over the next decade – creating an estimated 20,000 jobs (both direct and indirect) in the process.
Will those economic waves lap onto the shores of north central Ohio, potentially impacting Richland County?
“I don’t think any of us have any idea of what the real impact’s going to be,” Bowersock said. “We are 60 miles away, which means immediate direct impact’s going to be pretty weak in terms of people who live here that work there.
“I’d say there is a better chance there will be some companies in the Intel supply chain here. I know (Intel) plans are to basically source a good part of their supply chain to northeast Ohio, or within a certain radius of the plant. We’re definitely within that ring,” Bowersock said.
The California-based company did business in more than 100 countries, with more than 14,000 suppliers, 2,000 customers and 12,000 stock-keeping units, according to a story on SupplyChainBrain.com in 2019.
More than a terabyte of supply-chain and manufacturing data was processed every day, according to the website.
Still, until the initial decisions are made and the plant is set to open, no one knows anything for certain.
“Nobody seems to really have a firm grip (on the impact). Until they tell us what their needs are, it’s kind of hard to tell how we fit,” Bowersock said.
BE PREPARED … BUT FOR WHAT?
Emily Smith, Ohio public affairs director for Intel, told Richland Source the company’s move will make the state a new epicenter for advanced chipmaking in the United States and strengthen Ohio’s leadership in manufacturing, research and high tech.
In return, Ohio’s new capital budget announced last week sets aside up to $2 billion in cash incentives for Intel.
Smith said the company’s factories will bring a “vibrant community” of supporting services and suppliers around the state.
“We recognize that our presence brings change to communities and we intend these changes to complement the quality of life,” Smith said.
“One of the reasons we’re excited to be in Ohio is the strong sense of community here. As we’ve done at other locations, we plan to be an asset to the area.
“We look forward to partnering with local leadership and communities to help prepare for the changes that will come over the next several years,” Smith said.
Jim Lenner is the former village manager in Johnstown in Licking County who left that slot in 2021 to launch Neighborhood Strategies, a private consulting company in eastern Muskingum County.
Lenner, who has worked with Licking County officials to help prepare for Intel, said the company’s arrival could offer positives and negatives for Richland County.
“There could be supply chain wins with companies locating in (Richland) county,” he said. “Intel has a huge supply chain, absolutely enormous. The price of land (near New Albany and the surrounding area) is skyrocketing.”
Bowersock said Richland County is in the flight path for Intel suppliers.
“(Some local companies) are already probably doing some work with Intel and that will probably see an increase.
“Most of us, we all talk about it here and there, but nobody seems to really have a good firm grip. Frankly, until they tell us what their needs are, it’s kind of hard to tell how they fit,” Bowersock said.
The local housing situation may also play a key role, according to Bowersock.
“A lot of things that we probably do need to see happen between now and the time they start hiring and relocating people here to work for them in some cases is we need to see some housing development,” he said.
“Some of that I think’s being addressed, but (it’s) something that needs to start now to be ready two or three years from now, when they open the doors down there.
“We’re not really any different than pretty much everybody between there and here. Everybody’s housing market is screwed up right now,” Bowersock said.
Barrett Thomas, director of economic development for the Richland Area Chamber & Economic Development, said he has spoken to his counterparts in Columbus.
“The thing that I thought was interesting was a lot of companies there are freaking out,” Thomas said, referring to the potential of existing companies losing workers to Intel and the possibility their own plans for expansion may get delayed by the chip manufacturing tying up all of the area’s contractors.
Thomas, like Bowersock, said Intel impact will be felt in north central Ohio, but the depth of impact is not yet known.
“What that (impact) looks like could go a lot of different ways, depending on a million factors and timing of everything.
“We can speculate and I can give you answers that are opposite of each other and rationalize both of them. I think at a high level, the impact in Richland County to Intel is we’ll have some people commuting from here to there, but there are a lot of jobs that they need to hire for that really aren’t high wage jobs,” Thomas said.
“I think at this point we probably have competitive wages with what (Intel) will be,” he said.
Clint Knight, director of workforce development for the chamber, said making predictions about “brain drain” due to Intel isn’t safe to do at this point.
“Right now, we have about a wash of people that are leaving the county to work to the amount of people that are driving into work. So about the same amount of people that are driving outside of Richland County as they are driving inside. And I don’t see this changing or tilting that drastically in the next four to five years,” Knight said.
Lenner said Intel, like all companies, will feel the impact of a tight job market.
“In my experience, even three to five years ago, (employers wanted) a formal college education, a two-year degree or even a trade school diploma. In my opinion, that has shifted. Employers just want people and they will train them … high school graduates, or even less, so long as they are willing to show up, be reliable and trainable.
“It’s in everybody’s interest to work with Intel, work with their suppliers, see what skills are needed,” he said.
A geographic diversity among its suppliers makes sense for Intel, according to Thomas.
“If you think of running the company at a global scale, you’ve got suppliers that are key suppliers that you must have to produce your product. And it makes sense to have those close by to your production facilities, whether it’s in Taiwan or whether it’s in New Albany.
“But it also makes sense to have backup, like multiple suppliers, to all of those things all over the world. So when things hit the fan and you picked Ukraine to be your supplier of wire harnesses, which is a thing for the European auto makers, that was not a bad decision until their neighbor decided to rock up and crash the party.
“So it’s not their fault, nothing they could have done about that. But they need diversity in that supply chain so they can shift all of that work to somewhere else. Because if your house is being bombed, you’re probably not at work making wire harnesses,” Thomas said.
Impact may depend on imprint
When Intel made its announcement in January, company officials said the plan was to build two new chip plants, or fabs, on a 1,000-acre site, which would employ about 3,000 workers at an average salary of $135,000 annually.
Construction is expected to begin this year with the plants becoming operational in 2025. The company also said it could expand its footprint by adding up to 2,000 more acres and up to eight more fabs.
Thomas said the difference between two fabs and 10 fabs will impact the local impact.
“If it’s 10, it’s the world’s largest semiconductor plant. If it’s two, which is what it’ll start at, it’s a good size facility in the semiconductor land in the U.S.,” Thomas said.
Knight compared Intel’s announcement to Honda’s decision to begin making cars in Marysville, Ohio, in 1982.
“It’s not really apples to apples, but if you look at what Honda did, they came in and hired 50 or 60 people. And then over the course of the next 25 years, as that facility grew, their suppliers all over the state grew.
“We have suppliers for that facility here in Richland County. It’s going to be the same way with Intel, it’s just probably gonna happen faster,” Knight said.
Thomas quickly agreed.
“That is absolutely my prediction is that whole process. Honda is, I think, a good example … but in five years, instead of 25 years,” Thomas said.
Lenner said suppliers who don’t need to be 10 minutes away from the Intel site will look elsewhere.
“They could go up I-71 and be in your neck of the words in 60 to 90 minutes,” he said. “That’s not that far a drive for just-in-time deliveries. Folks in Richland County should be looking to make sure their infrastructure is ready to attract some of these suppliers.”
Developing the workforce and the economy
Knight spends his days trying to help ensure the local workforce is ready for all possibilities, including Intel.
“So we’re gonna have opportunities to see new business (coming) here that will require us to elevate our skill level, to find new skills, train our high school students and adults alike to do things that we don’t have … for business that we don’t have here right now,” Knight said.
In an area once dominated by large employers like General Motors, Westinghouse, Ohio Brass, Ak Steel, etc., diversifying the economy with smaller employers in a variety of sectors is crucial to long-term growth and success, the men said.
“Diversifying the economy makes us more resilient. Over the past 12 to 15 years, we’ve had two recessions that are very different from each other, that impact specific industries in huge ways. So the more diversity you have, the less up and down spike you have in employment, because you’ve got diversification out of each silo,” Thomas said.
A recently completed U.S. Corridor Comprehensive Economic Development Strategy will be a valuable tool for local officials to use in trying to attract Intel supplies into the region, including Richland, Ashland, Crawford and Wyandot counties.
It will be one of the keys to unlocking infrastructure funding that Intel suppliers will be looking for in making a decision where to locate.
A CEDS is required for programs funded by the federal Economic Development Administration, including the public works, economic adjustment assistance, local technical assistance program, and the short-term planning program.
It’s the kind of plan that can create a flow of money for needed infrastructure like roads, water, sewer and electric. It’s also the kind of plan that can be shown to companies looking to perhaps locate a facility in the region.
“(CEDS) is a tool used by the EDA that is key to triggering those funds. They don’t do a lot of economic development. They fund those of us who are doing it. The thing that makes communities eligible for their funding traditionally has been the CEDS,” Thomas said.
“That document helps describe the assets we have, the opportunity that this county and our neighboring counties present. But it also gets us access to funding through EDA. So when we get a supplier that comes in and says, ‘This is perfect. We want to be here at the aero site (near Mansfield Lahm Regional Airport). But we need 50 megawatts of power. And we need to be up in production in nine months.’
“Well, we can do that, but it’s gonna take some dollars. We can apply to EDA for funding to help support getting transmission-level power to that site so that they’re ready to go,” Thomas said.
Lenner agreed on the importance of the study.
“Anything that is readily available to a site selector working on behalf of a supplier, if the numbers shown in that study are what the business is looking for, it’s valuable,” he said.
“Any information a business doesn’t have to dig for itself is a huge benefit to attracting that business. Sometimes, if it’s (finding the information) too hard, or they can’t locate it, they just move on,” Lenner said.
“There will be a cost-benefit analysis by the (supplier). If I can save 50 percent on the cost of the land and only be 45 minutes away as opposed to 15 minutes away with a high cost of land … if the site has water, sewer, employees and available land, then it may fit the criteria of the supplier,” he said.
He said Intel’s announcement in January has sent land prices skyrocketing in central Ohio, especially in Licking County. That could be potential good news for counties located not far away.
“The Licking County auditor’s website shows (land) transfers (related to Intel) going for four times the market value. That money is going to have go somewhere,” Lenner said. “You can go buy a lot of property somewhere else for the same money.”
Bowersock said the City of Mansfield still owns about 135-140 acres near the airport and has verbal agreements to purchase about another 400 for developers.
“We have infrastructure capacity to build out those 400 acres. We can kind of meet pretty much what they want.
“Shovel ready, we have about 130 acres … that’s land where we’ve got roads, water, sewer, electric, gas, everything’s in place. For the most part, we’ve got most of the due diligence done already that they would typically do — environmental assessments and wetland surveys and all that other fun stuff — that runs the tab up on a piece of land.
“We’re very competitive on our land price. We’re actually still somewhat cheap. In part, that’s because the city has bought it at good prices and gone ahead and put the infrastructure in.
“We have been able to leverage dollars to help put the infrastructure in so that we don’t have to tack that whole cost onto the land. It gives us somewhat of a competitive edge,” Bowersock said.
Cyber warfare wing impact
Local officials are naturally curious about the potential link and impact between a company like Intel and the transition of the Ohio Air National Guard’s 179th Airlift Wing from a flying unit to the first National Guard cyber warfare wing in the country.
The unit’s eight C-130 transport aircraft are expected to be gone from the Mansfield Lahm flight line this month. New equipment associated with the new mission is expected to arrive in the fall of 2022.
Initial mission readiness is expected by 2024 and full operational capacity by 2027.
Lenner said conversations among local officials, Air Guard leaders, Intel and its suppliers should “start sooner, rather than later.”
“There could be potential for partnerships in industries related to Intel’s semiconductor business and what the National Guard is going to be doing,” he said.
Thomas said mission decisions are likely still being made.
“I think they had an idea and then somewhere between when this started and now, Russia invaded Ukraine and I think the plan changed. That’s my guess is they went, ‘You know, we could probably do a lot more. We probably should do a lot more,'” Thomas said.
Richland County Commissioner Tony Vero said he also sees the connection.
“We’re excited about what the future will bring from a technology perspective with the transition to a cyber wing in Mansfield and the Intel facility about an hour apart from one another,” he said.
Knight said it’s likely jobs in the cyber wing will be dramatically different than the unit has seen in the past.
“They’re very technical, high tech, modern learning .. and that’s what we are really looking at. That’s what I’m trying to talk a lot about right now is, ‘How do we help develop lifelong learners that can rapidly adapt with technology?'” Knight said.
Thomas said officials are looking at jobs that will exist two, three or even five years from now. Both men joined representatives from Ohio Gov. Mike DeWine’s office last week in a day full of meetings with local high school educators to discuss technology and the jobs of the future.
“What we need are workers that will continually learn and update skills because we can’t predict what the jobs are 10 years out. I mean, we’re looking in our crystal ball for five years and it’s fuzzy,” Thomas said.
“We can only guess because we’ve got some clear telegraphed marks with Intel and the cyber warfare wing, but I mean, it’s gonna change a lot. And that flexibility is what’s gonna serve employees well for their success ladder,” Thomas said.
Knight said the ability to constantly learn and develop new job skills are important across the board, “as we continue to move forward with technology and automation.”
“That’s not completely new. Educators are looking at those techniques and how to expose young people to that type of development. How do we develop those lifelong learners who can continue to update like an app. ‘Oh, I gotta update? I gotta update again?’
“That’s really what it’s like,” Knight said.
Bowersock said he believes there will be some links between the needs of Intel and the needs of the cyber warfare wing.
“I think it will play some part in it. A lot of the Guard unit is part-time and they typically like people in those types of positions that are in that field for their full-time jobs,” he said.
Bowersock said he thinks ANG recruiters may look for workers from Intel and its supply chain who are in the computer field.
Public/private partnerships are key
Bowersock, Thomas, Knight and Lenner all say local officials are asking the same key question: What should we be doing to prepare for Intel?
“They wanna know and they wanna be prepared, too. And I guess that kind of leads to my answer — which is the (public/private) partnership,” Thomas said.
“There’s not clear answers today, but we will get clarity as we move forward. What we need is that partnership, which is what’s happening, which is why they’re already asking,” Thomas said.
Knight said local public and private leaders must stick together, learn together and respond together.
“As an economic development community, from the government to the private sector and the education side .. we all need to learn together,” he said.
Intel has already posted initial job openings for its Ohio location and also created a website with information for potential suppliers.
Bowersock said it’s worthwhile for local companies to log onto the site at https://www.intel.com/content/www/us/en/supplier/working-together.html and learn more about Intel’s needs.
He said quality of product and consistency of service are likely key factors Intel expects from suppliers, as well as timeliness.
“Price is kind of the last thing (Intel will) worry about. They will pay more if you can get it there on time and it’s right all the time,” Bowersock said.
Lenner’s advice is to have already begun the conversation.
“2025 seems like a long way away. But it’s not. (Local officials) should be starting conversations about what could possibly happen and to be prepared. If you need to run a water or sewer line, for example, it may take 24 to 36 months,” he said.
