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Why Intel chose central Ohio for $20 billion semiconductor investment

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JobsOhio CEO & President J.P. Nauseef joins Yahoo Finance Live to discuss the new Intel chip factory that's projected to bring 10,000 jobs to Ohio.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back. This week, Intel chose the state of Ohio to be the home of its new $20 billion chip-making center. Here to talk about it is JP Nauseef, CEO and President of Jobs Ohio. JP, congratulations. This is a major coup for the state of Ohio.

It's my understanding that you guys weren't even in the running initially. Tell us how Ohio was able to win over Intel's business and beat out 39 other states.

JP NAUSEEF: Well, thank you for having me today. It's a real Cinderella story if you're outside of Ohio. If you're from Ohio, it was a logical decision by Intel. So we were made aware of the opportunity in May of this year-- early May. And team Ohio, starting with Governor DeWine and Lieutenant Governor Husted, my organization, Jobs Ohio, the local governments and jurisdictions, developers rallied around, addressed the initial request for proposal.

We submitted a proposal that kept us in the competition. And each interaction that we had with Intel, and they were focused on a site with infrastructure, power, transportation, roads, water. They were interested in access to talent. Ohio has 177 annual graduates from Ohio universities, and 21,000 of those are STEM and science and technology disciplines.

And we were able to move very quickly. And I believe at the end, Intel liked the balance that we had-- not only the site availability and the workforce, but we're an affordable state. We're a state that works together and collaborates. And I believe they saw that they could achieve their global competitive milestones and their success by partnering with Ohio. And we're very excited to welcome them here.

ALEXIS CHRISTOFOROUS: Well, certainly among the incentives, I know Ohio is going to widen parts of State Route 161 there in New Albany to make room for all of the influx of people coming into this chip plant. But I also know that Governor DeWine was able to successfully lobby Republican lawmakers for a mega-projects tax credit. Can you give us a feel for what some of those tax credits were like that the state was able to extend to Intel?

JP NAUSEEF: So we're very grateful to Governor DeWine and Ohio's legislature, the House Speaker Cupp and Senate President Huffman, for really rallying the legislature very quickly. What the job creation tax credit and the mega-projects legislation did, it was provide Ohio the same type of tools that our competitors had to compete for these very large projects-- essentially, a job-creation tax credit, which provides a future benefit to an employer. If they create a job, they get a tax credit for a future job commitment and creation, extended what Ohio had available from 15 years as the max to 30 years as a max. And that provided us one of the tools that we used to compete for Intel's location business.

ALEXIS CHRISTOFOROUS: Can you put a price tag on those incentives at all?

JP NAUSEEF: So Ohio made a significant and strategic investment. And Jobs Ohio, whenever we do a deal with a company that's expanding in Ohio or coming to Ohio, we invest. And those investments always create a return on investment for Ohio.

So it's built around the net new jobs created and the taxes that those new jobs produced for the state are always more than the amount of incentives that go into any projects. So it's a significant investment, and it will create and produce a significant return for Ohio, but, more importantly, a significant return for America. I'll let the administration talk to the media about the exact numbers and amounts of incentives. But it will certainly produce a significant return to Ohioans.

ALEXIS CHRISTOFOROUS: Yeah, the Biden administration did come out, President Biden himself, and praise this deal for bringing chip-making here in the US. Talk to me about the ROI for the state of Ohio. What does this mean in terms of jobs and revenue for the state?

JP NAUSEEF: It's of a significant magnitude. Just this industry, the semiconductor industry, arguably will be much more important in the next 20 years than it even was in the past 25 or 30 years. These semiconductors go into everything. And they go into everything that is produced here in the Midwest and then distributed elsewhere.

So it's going to have an impact well beyond the 3,000 direct jobs that were committed, the 10,000 indirect jobs, and the 7,000 construction jobs because it's producing an entire industry. We believe this will attract more technology companies that maybe hadn't given Ohio a look before but now with Intel's decision, will give Ohio a look.

And our strategic location and the center of the country in a COVID calibrated economy with now businesses looking to reshore and secure their supply chains in North America, Ohio becomes a natural choice for those companies. We're a one-hour flight from 60% of Canada's and United States population, and we're a one-day drive. So we're not only central for distribution, but we have a diverse economy ideal for companies like Intel to build out their supply chain.

ALEXIS CHRISTOFOROUS: And even Intel's CEO, Pat Gelsinger, said that he was thrilled to be launching what he called the silicon heartland in Ohio. Does this deal-- how much of a landmark is this deal in terms of launching a new era of manufacturing in the Midwest?

JP NAUSEEF: Well, we're proud of our manufacturing. We're known as a manufacturing state. And we took exception and have taken exception to-- some call it a Rust Belt state or a flyover state. And we're a great state that has a balance where we build things. So we roll up our sleeves, still get our hands dirty, but we also innovate. So this is a manufacturing at its heart, but it's also high tech.

And we believe it will bring a transformation of industry into our state. But at its heart, it's a manufacturing opportunity and it's right in the middle of America.

ALEXIS CHRISTOFOROUS: All right, JP Nauseef, CEO and President of Jobs Ohio, congratulations again on winning that business from Intel.