Ohio’s manufacturing future at risk amid funding cuts
Writer: Mirella Franzese
August 2025 — Ohio legislators have cut millions in funding for economic development while uncertainty threatens growth in one of the country’s key manufacturing hubs.
“Uncertainty is the enemy of investment,” said NAM President and CEO Jay Timmons at NAM’s annual State of Manufacturing Address earlier this year. “Manufacturing is a capital-intensive industry. We make decisions months and years in advance. … That’s why we need certainty. We need a clear, actionable, multistep strategy from our government — one that says, ‘We want you to invest here, hire here and succeed here.’”
“These issues cannot wait,” added Ohio Manufacturers’ Association President Ryan Augsburger at the event. “In Ohio, manufacturers have thrived because our leaders have taken decisive actions to keep our industry competitive.”
Ohio, the nation’s fourth-largest manufacturing economy by GDP, now faces substantial budget cuts that could hamper its ability to attract and retain large-scale projects.
A key concern is the All Ohio Future Fund, originally a $750 million initiative to prepare shovel-ready “mega sites” with infrastructure and utilities. That fund was cut to $250 million in the 2026-2027 state budget. One-third of the reduction was redirected toward brownfield remediation, which helps communities clean up old industrial areas and repurpose them for future development, and another third to the state’s general operating fund.
Economic development leaders say the cuts diminish Ohio’s competitiveness for attracting major manufacturers like Intel, Honda, and LG Energy Solution, or Joby Aviation — all of which have recently launched or planned major investments in the state.
“I do think we have lost some opportunities because communities won’t have the funds necessary to build the infrastructure,” said Matt Dolan, CEO of Team NEO, a regional economic development organization. “Companies will see that their project doesn’t pencil out if they have to, you know, put up-front infrastructure dollars in.”
Uncertainty at the federal level has only added to the pressure, with Ohio manufacturers already scrapping major projects in the decarbonization space as the U.S. Department of Energy (DOE) draws previously promised funding. Cleveland-Cliffs, one of the largest steel manufacturers in the nation, announced it would halt its $500 million hydrogen-based steelmaking initiative at Middletown Works after the DOE withdrew a previously promised $527 million grant.
Similar withdrawals have affected decarbonization efforts in the glass sector, raising concerns among local manufacturers about the reliability of federal support for industrial clean energy initiatives.
Ohio’s manufacturing sector is also facing labor shortages. Despite having the nation’s third-largest manufacturing workforce — 687,353 jobs, or 5.3% of the U.S. total — the industry could see a shortfall of 1.9 million employees nationwide by 2033, according to Timmons. Without a long-term strategy on apprenticeships, training and public–private collaboration, that gap could widen.
Expiration of the 2017 tax reform — considered “rocket fuel” for manufacturing in America as per Timmons — could also further sour the landscape for big manufacturers. A recent study by NAM found that if key provisions of tax reform expire, Ohio risks losing 208,000 jobs and $18.9 billion in wages, as higher after-tax costs could discourage upgrades or expansion.
While Ohio scales back, neighboring states are stepping up. Pennsylvania, for example, recently launched its own mega site program to attract large manufacturers.
Even as companies like Anduril invest hundreds of millions into Ohio, observers warn that without competitive infrastructure support and stable policy, such momentum could be short-lived.
Top image via JThorne/Wikimedia
