Together in Transformation: It’s Working – Part 1
Editor’s Note: What follows is the first part of our Growth Report 2021 cover story. Part 2 will be posted Tuesday morning. Click HERE to listen to the story.
YOUNGSTOWN, Ohio — The signs of sweeping transformation are evident – indeed, the most profound transformation in more than a half century.
Billions of dollars of new private and public investment, advanced technological applications to enable manufacturing and infrastructure, commitments to improve the quality of life, and granular efforts to stabilize and improve communities – neighborhood by neighborhood – are gaining momentum and guiding the future across the region.
All of this does not result from a single person, elected official, group, business or government body. Instead, leading this transformation are the collective and imaginative efforts of all of these stakeholders and many more.
From huge projects such as the Ultium Cells battery plant under construction in Lordstown and the planned launch of Lordstown Motors’ Endurance electric pickup to street-level action that makes a difference in the struggling inner cities. From the reinvention of business corridors into high-tech logistics and transit hubs to initiatives intended to shape the very nature of work and the future of business.
‘Voltage Valley’ Takes Shape
At the forefront is this reconstitution of the region’s automotive industry and the creation of a national hub for electric-vehicle manufacturing, research and development.
Lordstown Motors Corp., the electric-vehicle startup that purchased the former General Motors plant in 2019, has started production of 57 beta test models of its all-electric pickup, the Endurance. The first beta trucks should be completed in March and will be used for crash, engineering and validation testing. Some of these beta models will be sent to potential customers for feedback.
Preproduction models are slated for the summer. Full production is scheduled for September.
In January, Lordstown Motors said it had surpassed 100,000 early orders from potential commercial fleet customers. The company also said that it has been added to the U.S. General Services Administration listing, a first step to allow the company to sell to government fleets.
“Receiving 100,000 preorders from commercial fleets for a truck like the Endurance is unprecedented in automotive history,” says Lordstown Motors CEO Steve Burns.
Plans to develop a new all-electric van based on the Endurance platform are also in the works. Details regarding the van will be unveiled in June. The company says it is eyeing production sometime during the second half of 2022.
The van’s architecture could be used to manufacture the world’s first all-electric recreational vehicle, a broad goal set through a partnership between Lordstown Motors and Camping World Inc.
In December, Lordstown Motors signed a deal with Camping World that would establish a service and support network across the country for the Endurance, with the intent of creating future production opportunities, Camping World CEO Marcus Lemonis said.
In December, Lordstown Motors received $20 million in job-creation tax credits over 15 years from the state of Ohio. In return, Lordstown Motors pledged to create 1,570 jobs by Dec. 31, 2025, and maintain operations at the site for 18 years. To date, the company has hired 343 full-time employees. It expects to employ more than 1,000 by the end of this year.
Moreover, the startup said Jan. 28 that it has secured a multiyear agreement with LG Energy Solution, the battery division of LG Chem of Korea as part of its battery-cell supply chain.
Equally enhancing the region’s potential as a center for electric-vehicle production and research is Ultium Cells LLC – the General Motors/LG Chem joint venture. In mid-2020, Ultium began building its $2.3 billion electric-vehicle battery plant in Lordstown. The battery platform will be used to power GM electric and autonomous vehicles well into the future, generating new opportunities for workers.
“Our plan is to hire about 400 people by the end of 2021,” says GM spokesman Dan Flores. “We will continue planned equipment installation through 2022 and will grow the organization to about 1,100,” by the end of 2022, he says. “These plans are rather fluid as we learn how long it will take to train the workforce for these new high-tech jobs in battery cell manufacturing.”
Ultium’s 3 million-square-foot plant is near GM’s former assembly plant. The project was aided by a 75% property tax abatement from the village of Lordstown and $13.8 million in job-creation tax credits from the Ohio Development Services Agency.
An important overall component in this transformation – the “Voltage Valley,” as dubbed by Lordstown Motors’ CEO – is the formation of partnerships focused on research, development and training the next generation of advanced manufacturing workers.
Central to this are plans to develop an Energy Storage and Innovation Center through a partnership between Youngstown State University, the U.S. Department of Energy, and Oak Ridge National Laboratory in Tennessee. DOE announced Jan. 19 that it would award $1 million to fund the initiative.
“This partnership is a great example of how government can work to bolster efforts on the ground in our community to dominate in the clean energy economy. The electric energy industry is not only a major key to reigniting American competitiveness but also to reigniting our workforce here in northeast Ohio,” proclaimed U.S. Rep. Tim Ryan, D-13, in a statement. “With Lordstown Motors, Brite Energy Innovators, the GM-LG Chem battery plant, Youngstown State and others, our region is leading the world in creating the energy of the future and putting Voltage Valley on the map.”
The Energy Storage and Innovation Center would be “based in the Midwest,” DOE said, and serve as a training center to support battery and electric-vehicle manufacturing ventures in northeastern Ohio.
“YSU and our many partners are committed to playing a major role in training, research, innovation, infrastructure and workforce development services in order to help transform the economic engine of our region,” said YSU President Jim Tressel.
The project received a portion of $5 million that the state awarded YSU as part of Ohio’s clawback agreement with GM, which stipulated the automaker must invest $12 million in the Mahoning Valley as tax-credits restitution for closing its Lordstown plant.
Rick Stockburger, president and CEO of Brite, the energy business incubator in Warren, says the Energy Storage and Innovation Center is just one example of how the region is answering the call to redevelop and diversify its economy.
“It’s a great thing for the community,” Stockburger says. “We’re going to be in a good position to make sure we’re able to provide the workforce and the research capabilities to ensure they’re not just competitive but dominant in the energy storage market.”
Plus, the confluence of the Ultium and Lordstown Motors projects has spurred interest from early-stage companies in the EV market that are interested in perfecting their research and growing business here.
“We’ve had companies from Canada and as far as The Netherlands that are looking at the Voltage Valley in a meaningful way,” Stockburger says. “We’re hoping those companies have opportunities here. It’s pretty exciting.”
Stockburger says Brite is also seeing a significant increase from startups that look to join the EV industry supply chain. “We have more startup companies coming through our deal flow than we’ve ever had. And that’s a huge part of the relationship with Lordstown Motors and Ultium.”
Other companies as well are expanding their technological footprints in the region, Stockburger says. Aptiv, formerly Delphi Packard, is devoting more of its resources to support the EV market, while Tata Steel in Warren produces specialty metals used in battery casings.
“As we see the automotive industry turning to electrification, we are in a very good position to have an economic resurgence,” Stockburger says.
Infrastructure Improvements, Sophisticated Logistics
Sparking potential growth in and around the Lordstown area is an ambitious plan to invest millions of dollars in infrastructure improvements that would make the Mahoning Valley among the most technologically sophisticated logistics centers in the United States.
“We would have the most attractive transportation system in the country,” says Mike Hripko, economic recovery coordinator for Eastgate Regional Council of Governments.
The plan is to develop a $25 million Smart Logistics Hub in and around the Lordstown – North Jackson corridor that would greatly elevate this region’s presence as a prime location for manufacturing, warehousing and distribution.
Eastgate has partnered with the Western Reserve Port Authority, the Youngstown/Warren Regional Chamber and YSU to secure a $500,000 grant from the Ohio Department of Transportation that would fund an engineering study. The study would focus on high-tech transportation routes mostly along Bailey Road and state Route 45 – parallel thoroughfares that extend north and south from North Jackson to Lordstown.
Major developments such as Lordstown Motors, Ultium and TJX HomeGoods’ $160 million distribution center nearing completion along Bailey Road would be in the heart of the network. Another element critical to the project is the $1 billion Lordstown Energy Center, a natural-gas-powered electric generation plant commissioned two years ago. A second plant, the Trumbull Energy Center, remains in the planning stages.
“This is a highly technical project,” Hripko says. The corridors would be outfitted with radio frequency identification capability – which uses electromagnetic fields to identify and track ID tags on trucks. “You would have up-to-the-minute information to the dock or warehouse.”
Other advanced applications include electric automated freight shuttles, integrated and electrified interchanges at Interstates 76 and 80, a smart communications corridor that uses fiber optics along the Ohio Turnpike, and a solar energy field.
There is also the potential to install in-road charging capabilities, a concept under study at Purdue University and Utah State University, says Jim Kinnick, executive director at Eastgate.
In-road charging would allow an autonomous or electric-powered vehicle to recharge its battery in a designated shoulder lane along a quarter-mile stretch of highway as it moves at a speed of about 40 miles per hour.
“Instead of plugging in, you could pick up enough charge to go another 100 miles or so,” Kinnick says.
Kinnick and Hripko believe the Lordstown corridor would provide an ideal location to pilot this technology.
Eastgate received $2.5 million from GM’s settlement with the state – money Kinnick says could be used to leverage other funding opportunities such as a $10 million Build grant from the U.S. Department of Transportation. DOT rejected an earlier application for a grant in support of the project.
The ultimate goal is to attract diverse industries, Kinnick says. “We want to populate that vacant land with warehouses, distribution centers and manufacturers.”
Vital to this effort are private-public partnerships.
Two years ago, Eastgate received a $10.85 million Build grant to fund the nearly $27 million Smart2 corridor along Fifth Avenue in Youngstown. This was made possible because of partnerships with YSU, Mercy Health’s St. Elizabeth Youngstown Hospital, the city and other entities. The first two phases that involve roadwork are expected to be finished in 2022, while a third phase – the addition of an autonomous shuttle – would be completed last.
“The entire community collaborated on that project,” Hripko says.
It was this collaboration that led to the Mahoning Valley’s recognition in January from the Baldrige Communities of Excellence 2026 program.
The program, established by the Washington, D.C.-based Baldrige Foundation, recognized business and community partnerships in the Mahoning Valley for achieving a “true transformation” since the collapse of the steel industry in the late 1970s and early 1980s.
“It is heartening to watch Youngs-town revitalize itself and use the Baldrige framework to do it,” Baldrige CEO Al Faber told community stakeholders via Zoom during the award presentation Jan. 5. “It is true transformation and true change.”
Faber is a 1979 graduate of Chaney High School.
The Baldrige program raises awareness about excellence in driving the U.S. and global economies, initially establishing criteria for private enterprise through the National Institute of Science and Technology. It has since expanded to include community and economic development organizations.
Participating in the program is a consortium of community leaders: Eastgate, the Youngstown/Warren Regional Chamber, the Western Reserve Port Authority, the Youngstown Foundation, The Raymond John Wean Foundation, the Community Foundation of the Mahoning Valley, YSU, Eastern Gateway Community College and Mercy Health Foundation.
“We’re pleased to be participating in this partnership to ensure that we’re strategizing, communicating and prioritizing economic development, health and safety and the quality of life throughout the Mahoning Valley,” says Sarah Boyarko, chief operating officer and vice president of economic development at the chamber.
“Economic development is always a team effort,” adds John Moliterno, CEO of the Western Reserve Port Authority.
Over the past two decades, the port authority has evolved from an organization that oversees the Youngstown/Warren Regional Airport to an essential participant in economic development projects throughout Mahoning and Trumbull counties.
The most recent example is the pending acquisition of nearly 1,000 vacant acres in Warren that once were home to Republic Steel, donated to the agency by the landowner, BDM Warren Steel Holdings.
Establishing control of available land is a ground floor step in rebuilding the economy, Moliterno says. “We’re helping to buy and sell properties to create jobs,” he says.
Among the projects the port authority has facilitated are five new student-housing developments around YSU; renovation of the Harshman Building in downtown Youngstown for expansion of Eastern Gateway Community College; the repurposing of the former Score building in Warren to a winery along the Mahoning River; and the redevelopment of the former Youngstown Developmental Center campus in Austintown.
“None of us can do everything. We’ve worked with all of these entities – the chamber, YSU, county officials, cities, development and community agencies, labor organizations and businesses – to do it the right way,” Moliterno says.
Copyright 2022 The Business Journal, Youngstown, Ohio.