Politics and business mix in new Cincinnati-Dayton collaboration

Could combination win the region more manufacturing jobs?


Cincinnati and Dayton are jointly applying for federal designation as a “manufacturing community.” Winning the designation would give local organizations bonus points when applying for grants and other federal funding. In making the region’s case for the designation, the application promotes the region’s strength in aerospace manufacturing.

1. ECONOMIC GROWTH. Aerospace manufacturing is “a growth industry and it’s a growth industry that requires skilled workers and the jobs that are associated with aerospace are high paying jobs,” said Mike Heil, president and chief executive officer of Ohio Aerospace Institute.

2. MORE WINS. A mega Cincinnati-Dayton region could do more to put Ohio on the radar of companies looking to expand or relocate operations.

Development agencies are “boots on the ground trying to get companies in the door, but they’ve got to be interested in coming to Ohio first,” said Denise Hamet, Middletown economic development director.

3. LIMITED RESOURCES. If the Cincinnati-Dayton region wins the designation, various organizations throughout the 27 counties making up the Cincinnati-Dayton metroplex stand to get more federal funding to boost the manufacturing industry, which represents more than 10 percent of both cities’ economies.

Cincinnati and Dayton could create more jobs working together than either city could alone or competing against each other, the cities’ mayors contend.

John Cranley of Cincinnati and Nan Whaley of Dayton were elected new mayors in fall 2013 of southwest Ohio’s largest cities. Among their top priorities upon taking office was to reach out to each other.

“We are willing to look at any joint opportunities to market our region so we can be even more competitive nationally and internationally,” Cranley said.

Cincinnati is not the competition and vice versa, Whaley said. Jobs today are fought for and won on a global playing field.

“I think it’s important the two regions lead an effort to align our development strategies and align our growth in southwest Ohio,” said Whaley, noting she spends one day a month in Cincinnati talking to business and community leaders.

“I think for the leaders of the two large cities to consciously work on it is very new,” she said.

A mega Cincinnati-Dayton region, comparable to Dallas-Fort Worth or Minneapolis-St. Paul, could put Ohio on the map for more companies looking to relocate or expand, Whaley and other local leaders say.

“Dayton in itself sounds small. Cincinnati’s a little bit bigger. You combine the two, everybody’s going to take a double look at you,” said Lisa Novelli, president and chief executive officer of National Composite Center in Kettering, a nonprofit focused on manufacturing industry suppliers.

The first test of the new relationship is a joint application seeking designation as one of up to 12 “manufacturing communities” nationwide from the U.S. Economic Development Administration. The cities of Cincinnati and Dayton, along with their respective head development agencies REDI Cincinnati and Dayton Development Coalition, are co-applicants on the paperwork.

If the Cincinnati-Dayton region receives the designation, local governments, universities, companies and other organizations in the 27-county region including northern Kentucky, Butler County and Springfield can list the “manufacturing community” status on grants and other requests for industry-related federal funding. The designation would give their applications preferential treatment, said John Owen, research director for Dayton Development Coalition.

Millions of dollars are at stake, Owen said. A total pot of $1.3 billion is available for the yet-to-be-named manufacturing communities to apply for.

The application deadline is Monday. Winning the designation doesn’t come with a check in the mail. Once the communities are named by the end of 2014, organizations can then apply for various multiple funding opportunities.

The Cincinnati-Dayton collaboration is “really important because we only have so many resources,” said Denise Hamet, economic development director of Middletown, located about halfway between the two larger cities on Interstate 75. Middletown officials have written a letter of support for the application.

Cranley’s and Whaley’s hand-shaking is being called precedent-setting.

“I think the message is that the process is an important thing,” Hamet said.

Before now, most collaboration up and down Interstate 75 was university to university, company to company or other institutional efforts, said Gary Conley, president and chief executive officer of TechSolve. Nonprofit TechSolve, headquartered in Cincinnati, with a Dayton office, provides manufacturing industry consulting and other services.

“It’s the first time that I know of that there’s been a formal recognition of this opportunity by the political leadership on either end of the corridor,” Conley said.

“It’s the first time there’s been a formal shaking of hands,” he said.

An exercise in collaboration

Neighboring metropolitans, Cincinnati and Dayton share common interests and industries such as the promotion of abundant water sources. Both cities have a rich manufacturing history including the auto and aerospace sectors.

Under JobsOhio, the nonprofit private agency established in 2011 by Ohio Gov. John Kasich’s administration to lead the state’s job creation efforts, REDI Cincinnati and Dayton Development Coalition were named two among six regional JobsOhio Network partners statewide. As such, REDI and the Coalition are go-betweens for local jurisdictions and JobsOhio officials in Columbus for crafting business deals to retain and attract businesses.

Through JobsOhio, REDI and the Coalition work together now more than they did before, said Dave Burrows, economic development director of the Coalition.

But the most recent effort is the first time city government or development agency leaders recall working on an application together, or the mayors getting directly involved.

“I don’t think either city by themselves could do this,” Burrows said.

“I think what the exercise means to me is collaboration can work, regionalism can work, but you’ve got to take steps to do that, you’ve got to build trust, you’ve got to do all those steps to get there and we’re getting there,” said Matt Davis, interim executive director of Regional Economic Development Initiative (REDI) Cincinnati.

Whether or not Cincinnati-Dayton is designated a federal manufacturing community, the process has opened a dialogue between city leaders, Whaley said.

Hopes are the combined forces of Cincinnati and Dayton help the cities avoid repeating past misses, Whaley said.

At the end of 2013, the Federal Aviation Administration rejected a joint Ohio-Indiana application for the region to be a site to test unmanned aerial vehicles.

The current application Cranley and Whaley hope to bring home is an initiative of President Barack Obama’s administration, among others in manufacturing, called Investing in Manufacturing Communities Partnership.

Political power could make a difference in a Cincinnati-Dayton win this time.

“The mayors, their involvement is critical. As the chiefs of their respective jurisdictions, they’re the face of their communities,” Davis, of REDI Cincinnati, said. “They can carry a lot of sway when it comes down to pushing this designation over the hump.”

The challenge going forward is laying down defenses. Day-to-day, REDI and the Coalition are held accountable for creating jobs in their territories. The dividing line is Ohio 63.

A job won in Miami Twp., for example, doesn’t count for REDI Cincinnati. And a job won in Hamilton, for example, doesn’t count for the Coalition.

“There’s nothing bad about this relationship,” Burrows, of the Coalition, said. “I’m not sure what it may or may not lead to.”

“What they’re doing politically is completely different from what we’re doing on the ground,” Burrows said.

A manufacturing powerhouse

One area where Cincinnati and Dayton can equally flex their muscles is aerospace manufacturing.

The joint application to be submitted to the U.S. Economic Development Administration flaunts the region’s higher-than-national-average concentration of jobs and businesses in the aerospace parts and products manufacturing sector, Owen, of the Coalition, said. He’s helping prepare the application.

Nearly 12,000 people worked in 2012 in aerospace manufacturing in the Cincinnati and Dayton metropolitan areas for private industry, according to the U.S. Bureau of Labor Statistics. As of 2012, the most recent information available, there were 61 private business locations related to aerospace manufacturing in the Cincinnati-Dayton region.

GE Aviation, which makes jet engine and engine components for commercial and military aircraft, anchors the local industry in the Cincinnati area, operating multiple sites.

The numbers mentioned above don’t include the industry’s Dayton-area anchor to the north—Wright-Patterson Air Force Base, Ohio’s largest single site employer of approximately 27,000 military personnel and civilians.

The Ohio Air National Guard base in Springfield employs an additional approximately 1,200 military members and civilians.

“This application provides us an opportunity to structure that collaboration in a way that helps us further develop this enormous asset we have as a major aerospace center,” Conley, of TechSolve, said.

“There’s really a great opportunity for thoughtful expansion if you would of aerospace suppliers in the region, and that will also create opportunities for companies in lower levels of the supply chain to benefit,” he said.

GE Aviation has invested about $350 million since 2012 at its Evendale headquarters campus, Dayton-area suppliers, West Chester Twp. and Sharonville additive manufacturing technology locations, and an engine test site in Peebles. This demonstrates the company’s long-term commitment to the so-called aviation corridor, said Tony Aiello, vice president of engine assembly and engine test operations for GE Aviation.

“In recent years, the state has done a much better job in recognizing the economic importance of aerospace jobs. These jobs not only bring income and tax base, but bring intellectual capital,” Aiello said in an email.

“Our relationships with (University of Cincinnati, University of Dayton and The Ohio State University) are important to our success,” he said.

Most recently, GE Aviation announced plans to build a jet engine assembly plant in Indiana in partnership with Purdue University.

“All of the states have recognized the importance of aerospace jobs, and the competition between the states is fierce,” Aiello said.

“We opened plants in Alabama, Mississippi, and North Carolina, and those states were very aggressive in developing incentives and aligning their universities to our needs. This area will continue to be the hub for GE Aviation. However, there are significant benefits in expanding our reach throughout the United States,” he said.

Commercial aviation is a growth industry, said Mike Heil, president and chief executive officer of Ohio Aerospace Institute, a Cleveland-based nonprofit with Dayton offices focused on industry, university and government collaboration on the topic.

“Ohio is the number one supplier state to both Boeing and Airbus who are the market leaders in commercial airplanes,” Heil said. “It’s a growth industry that requires skilled workers and the jobs that are associated with aerospace are high paying jobs.”

“The thing we need to fix is we need to get the companies that do final assembly here,” Heil said.

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