2010 Team NEO Awards: Business Retention

It’s one thing to have a 10,000-pound elephant in the room. It’s quite another when it’s a 50,000-ton press.

That’s the problem representatives of the state of Ohio, Cuyahoga County, the cities of Cleveland and Independence and the village of Cuyahoga Heights had to confront when they were informed early last year that there was a problem at Alcoa’s Forged and Cast Products Division in Cuyahoga Heights. At stake were more than 1,000 jobs at the Alcoa Harvard Road plant in Cuyahoga Heights, more than 120 executive positions at the division’s headquarters on Rockside Road in Independence, plus another 130 plus jobs at a research center in the city of Cleveland.

In the summer of 2008, after receiving a 10-year, $360 million contract from Lockheed Martin to produce alloy aluminum components for the new F-35 Joint Strike Fighter program, engineers at the Alcoa plant in Cuyahoga Heights noticed stress fractures on the base of the 50,000-ton press, which would be used to squeeze massive hunks of aluminum into dies, forging them into aircraft components. Years of use had taken their toll on the press, built in 1955. To become operational, the 92-foot, eight-story press would have to be completely refurbished. And the price tag wasn’t cheap. It would cost more than $70 million.

“So we got called to a meeting in Cuyahoga Heights in early 2009, and representatives of the state and county as well as representatives of the three cities and Alcoa were all there,” says Tracey Nichols, director of the Department of Economic Development for the city of Cleveland. “But before we even entered the meeting, Mayor Jackson told me to get in there and do what needed to be done to keep Alcoa in our region.”

The state of Ohio stepped up to the plate first, awarding a total of $20.6 million in funding that included a Job Retention Tax credit of $15,627,375 as well as a $3 million direct loan and a $2 million Rapid Outreach Grant.

But Alcoa representatives also wanted strong support from local communities and the county so they could go back to the board and show that local governments were actively involved. Without that support, the work could be shipped overseas for a minimal investment.

Although it didn’t have as much to lose as the other two local communities, the city of Cleveland stepped up to guarantee a local match on a loan of $800,000 on behalf of the three local entities. It not only saved the jobs at Alcoa, but it also paved the way for the company to invest an additional $110 million in its Cleveland Works through 2011. This also has the trickle-down effect of saving jobs at local businesses patronized by the many Alcoa employees and local vendors that support Alcoa.

“I always tell people that Alcoa is Cuyahoga Heights,” says Jack Bacci, mayor of the village. “Without them, we wouldn’t be half the community and half the school district that we are.

“And I believe we would have done anything to try and keep them,” he adds. “But without the prowess that the city of Cleveland has, a small community like Cuyahoga Heights would never have been able to do this without our core city.”