Buckeye Boom: Ohio Sees the Job-Creating Benefits of Global Investment

June 14, 2016

In 2008, in the depths of the Great Recession, General Motors shut down its Moraine, Ohio assembly plant.

“They went from 4,000 employees to zero employees,” said Michael Davis, the city’s economic development director.

Alone, that would have been bad enough, but it was part of a string of reductions and closures that had devastated a region that was once a major automobile manufacturing center. Moraine and the state of Ohio saw potential in this turn of events.

In 2015, after years of reinvention and outreach by the city, they welcomed the North American arm of Chinese manufacturing giant Fuyao Glass Industry Group into that vacant building – and just a year later, they are now watching them expand their operations.

For the city of Moraine, the Dayton Development Coalition and for JobsOhio, the privately funded statewide economic development agency, recruiting Fuyao’s investment was the result of a concentrated effort to learn what foreign companies need and how to match those needs with infrastructure the state had in place.

“We had probably seven million square feet of space available, four million directly related to the General Motors facility,” said Davis. “We looked at it as an asset: Cheap space, significant amounts of it, and a skilled workforce ready to work.”

After years of promoting the site, Davis received a site inquiry from JobsOhio in 2013 to participate in an effort called Project Southbound. It was that effort that ultimately brought representatives of Fuyao to Moraine for a tour of the building.

“We were unique in that Fuyao had never located into an existing building before,” said Davis. “We knew we had challenges, but also knew we’d be cheaper than building new on a Greenfield site.”

“It’s a great case study of how you take a behemoth building like this and actually do something with it,” said Kristi Tanner, senior managing director for JobsOhio. It's just incredible. That's what we live for."

Tanner was one of the officials who dealt directly with Fuyao’s representatives on the Moraine site. She said there had initially been resistance to looking at an existing facility, given the company’s history of building new.

“But it ended up making its way to the short list, and having the chairman come look at it,” she said.

Chairman Tak Wong Cho – who founded the company in 1987 – is renowned for his hands-on leadership and business acumen. It has made him a billionaire and one of the world’s leading philanthropists. For the prospect to move forward, Chairman Cho ultimately needed to be convinced to embrace a “brownfield” facility in Ohio for their flagship North American operation.

The key factor was showing Fuyao how the company could benefit from a quick turnaround. It would take much longer to build a factory from scratch than to retrofit existing space. Fuyao could also save significant costs by not building a new building, freeing up capital for other uses.

It was a winning argument. Fuyao initially bought 1.4 million square feet on 110 acres in the old General Motors plant and has since expanded its holding there. Their investment has grown to $450 million and the number of U.S. jobs they created has risen from around 800 to 1,400, with on-site employment expected to exceed 2,000 people by the end of the year.

“Knowing the client is the biggest piece of advice for anyone working on an international basis,” Tanner said. “You have to know them intimately, their business problems, their needs, what they want to accomplish, and then figure out how to take your product and fit it into that need.”

That kind of awareness is paying further dividends. Davis noted that, with Fuyao in place and growing, further foreign investment is being encouraged. One of Fuyao’s suppliers is looking at Moraine – a small operation at first, with 20 jobs and 40,000 square feet – but he thinks it will likely encourage other suppliers to consider locating next door to the auto glass manufacturer.

“We started the [foreign outreach] effort before, but definitely needed Fuyao to put us over and make us a healthy diversified environment,” said Davis.

Fuyao is not alone in bringing foreign direct investment to Ohio. Honda established one of the first Japanese auto manufacturing plants in the country in the early 1980s, and there are companies from Germany, the UK, Canada, France, and Switzerland represented.

But there is definitely a ripple effect from the high-profile Fuyao project in Moraine, according to Tanner. Jobs-Ohio has been engaging in furthering its outreach to foreign companies and using Fuyao as an example of what can be done with existing infrastructure and workforce and how that plays to a company’s advantage. But the state is also seeing proactive interest because of what’s happening in Moraine.

“We’ve picked up the phone to a lot of callers who said, ‘I heard Fuyao’s in Ohio and we’d like to come and meet with you,’” she said.