What If Ohio Developed Different Manufacturing Policies?

The Actual History

Ohio's manufacturing history represents a quintessential American industrial narrative—a story of remarkable rise followed by painful decline. By the mid-20th century, Ohio had become one of America's manufacturing powerhouses, with cities like Cleveland, Cincinnati, Toledo, Akron, and Youngstown forming vital nodes in the nation's industrial network. The state's manufacturing prowess spanned diverse sectors: steel production in Youngstown and Cleveland, automotive manufacturing in Toledo and Dayton, rubber and tire production in Akron, and machine tools in Cincinnati.

This industrial strength peaked in the post-World War II economic boom. In 1969, manufacturing accounted for approximately 39% of Ohio's gross state product and employed nearly 1.4 million workers—roughly 35% of the state's total workforce. Ohio-based corporations like Goodyear, Firestone, and Republic Steel were internationally recognized industrial giants.

However, beginning in the late 1960s and accelerating through the 1970s and 1980s, Ohio's manufacturing sector faced mounting challenges. The oil crises of 1973 and 1979 dramatically increased energy costs for energy-intensive industries like steel and automotive manufacturing. Meanwhile, rehabilitated industrial economies in Japan and Western Europe began producing high-quality goods that competed directly with Ohio's manufacturing output. By the late 1970s, these international manufacturers had developed more efficient production methods and often operated with newer equipment and lower labor costs.

The state's policy response to these challenges was largely reactive rather than proactive. Ohio, like most American states during this period, adhered to a relatively laissez-faire approach to industrial policy. While the state government offered some tax incentives and infrastructure improvements to retain businesses, it lacked a comprehensive strategy to help industries modernize, diversify, or transition. Governor James Rhodes, who served non-consecutive terms from 1963-1971 and 1975-1983, primarily focused on attracting new businesses through low taxes and regulatory environments rather than preserving and transforming existing industries.

Between 1969 and 1983, Ohio lost approximately 200,000 manufacturing jobs. The decline accelerated dramatically in the early 1980s during a severe recession, with the state losing an additional 290,000 manufacturing jobs between 1979 and 1983 alone. Symbolic of this decline was "Black Monday" on September 19, 1977, when Youngstown Sheet and Tube announced the closure of its Campbell Works plant, instantly eliminating 4,100 jobs.

By the mid-1980s, many of Ohio's industrial cities faced severe economic distress characterized by high unemployment, declining populations, eroding tax bases, and deteriorating infrastructure. This period transformed Ohio and other Great Lakes manufacturing states into what became known as the "Rust Belt"—regions marked by closed factories, economic stagnation, and social dislocation.

Subsequent decades saw modest recoveries and transformations. Some Ohio industries adapted by embracing automation, developing higher-value products, or finding specialized market niches. The state gradually diversified its economy toward services, healthcare, education, and technology. However, manufacturing employment never returned to its previous heights. By 2020, manufacturing accounted for approximately 17% of Ohio's gross state product and employed roughly 700,000 workers—half the peak level of 1969.

The legacy of this industrial decline continues to shape Ohio's economy, politics, and social fabric. Many formerly prosperous industrial communities still struggle with population loss, poverty, and infrastructure challenges. The economic dislocations contributed to political realignments, as formerly reliable Democratic voters in industrial regions became increasingly open to Republican appeals focused on trade protectionism and economic nationalism.

The Point of Divergence

What if Ohio had implemented innovative and forward-thinking manufacturing policies in the early 1970s? In this alternate timeline, we explore a scenario where Ohio's leadership recognized the emerging threats to traditional manufacturing earlier and responded with a comprehensive industrial strategy that combined preservation, adaptation, and transformation.

The point of divergence occurs in 1971, when Governor John Gilligan, rather than pursuing conventional economic development approaches, establishes the Ohio Industrial Futures Commission (OIFC)—a public-private partnership tasked with analyzing global industrial trends and developing policies to maintain Ohio's manufacturing competitiveness. This initiative could have emerged through several plausible pathways:

First, the political alignment could have shifted. In our timeline, Governor Gilligan (1971-1975) initiated some progressive policies but lacked the political coalition to implement comprehensive industrial policy. In the alternate timeline, perhaps labor unions, business leaders, and academic experts forged an unusual alliance around industrial preservation after witnessing early warning signs of deindustrialization.

Second, a different international perspective might have emerged. In this alternate timeline, Ohio policymakers could have been more attentive to international developments, particularly Japan's Ministry of International Trade and Industry (MITI) and West Germany's coordinated industrial policies. Study delegations to these countries might have returned with policy innovations adaptable to the American context.

Third, the catalyst could have been research-driven foresight. Ohio's universities, particularly Case Western Reserve, Ohio State, and the University of Cincinnati, might have established industrial policy think tanks that accurately projected global competitive threats and produced actionable recommendations that gained political traction.

Fourth, specific industry crises could have occurred earlier and prompted more creative responses. If certain plant closures or international competitive shocks had happened in 1970-71 instead of later in the decade, the political will for innovative policies might have coalesced earlier.

In this alternate timeline, the OIFC produces a landmark report in early 1972 titled "Securing Ohio's Industrial Future," which outlines a 20-year strategy for maintaining manufacturing competitiveness through targeted investments, worker training, research and development partnerships, and gradual diversification. Rather than being shelved, this report becomes the blueprint for a series of policy innovations that Governor Gilligan begins implementing immediately, and which subsequent administrations—both Democratic and Republican—continue to refine and expand.

Immediate Aftermath

Initial Policy Implementation (1972-1975)

The establishment of the OIFC and implementation of its recommendations fundamentally altered Ohio's industrial trajectory beginning in 1972. Under Governor Gilligan's administration, the state legislature approved the Industrial Preservation and Adaptation Act, which allocated $300 million (equivalent to approximately $2 billion in 2025 dollars) toward a three-pronged strategy:

First, the creation of five Industry Modernization Centers (IMCs) located in Cleveland, Cincinnati, Dayton, Toledo, and Youngstown. These centers provided technical assistance to small and medium-sized manufacturers for upgrading production equipment, implementing quality control systems, and adopting more efficient management techniques. Many of these innovations were adapted from Japanese and German manufacturing models, which Ohio's industrial policy experts had studied extensively.

Second, the establishment of the Ohio Industrial Finance Authority (OIFA), which offered low-interest loans to companies investing in modernization, energy efficiency, and pollution control technologies. This financing mechanism proved particularly crucial as traditional manufacturers faced capital constraints during the economic uncertainties of the early 1970s.

Third, the formation of Industry-Academic Partnership Programs (IAPPs) between major Ohio universities and key industrial sectors. The University of Akron partnered with the rubber industry, Case Western Reserve with steel manufacturing, Ohio State with automotive suppliers, and the University of Cincinnati with machine tool producers. These partnerships focused on applied research to improve manufacturing processes and develop new product lines.

Political Dynamics (1972-1975)

The implementation of these policies reshuffled political alignments in Ohio. Initially, the programs faced skepticism from fiscal conservatives and some business leaders who viewed them as government overreach. However, as early results demonstrated effectiveness, a distinctive "Ohio Model" of public-private industrial policy gained legitimacy across the political spectrum.

Labor unions, which initially worried the modernization efforts would eliminate jobs, became cautious supporters after securing commitments for worker retraining programs and participation in management decisions regarding technological implementation. The United Auto Workers and United Steelworkers, in particular, developed a more collaborative approach with management under this new industrial framework.

Early Economic Impacts (1972-1975)

The first measurable impacts of these policies appeared by 1975. While manufacturing employment in Ohio still declined slightly (by approximately 50,000 jobs compared to 1969 levels), this represented a significantly better outcome than other Great Lakes states that had not implemented similar policies. More importantly, productivity in Ohio manufacturing increased by approximately 15% between 1972 and 1975, allowing wage increases without equivalent price increases.

Several early success stories reinforced political support for the policies. Republic Steel's Cleveland works implemented oxygen furnace technology with OIFA financing, increasing efficiency by 22% and maintaining competitiveness despite rising energy costs. In Akron, Goodyear accelerated the development of radial tire technology through its IAPP with the University of Akron, allowing it to better compete with Michelin's growing market presence.

Energy Crisis Response (1973-1975)

When the 1973 oil crisis struck, Ohio was better positioned than in our timeline. The OIFC had already identified energy dependency as a vulnerability and had launched an Industrial Energy Efficiency Initiative in late 1972. When oil prices quadrupled, Ohio manufacturers had already begun implementing energy conservation measures and exploring alternative energy sources.

This proactive stance allowed Ohio industries to weather the energy shock better than competitors in other states and countries. The state government further accelerated these efforts by establishing the Energy Adaptation Fund in November 1973, which provided emergency financing for companies implementing energy efficiency measures and diversifying energy sources.

Electoral Impact and Policy Continuity (1974-1978)

Despite these early successes, Governor Gilligan narrowly lost his reelection bid in 1974 to former governor James Rhodes. However, unlike our timeline where this represented a shift away from industrial policy, in this alternate timeline Rhodes embraced and modified rather than abandoned the industrial initiatives.

Rhodes, a pragmatic Republican, recognized the political and economic benefits of the emerging Ohio Model. His administration rebranded the initiatives under the "Advanced Manufacturing for American Prosperity" program while maintaining their core elements. This bipartisan embrace of industrial policy created stability and predictability that benefited long-term industrial planning.

Under Rhodes, the focus shifted slightly toward attracting new manufacturing investments while continuing to modernize existing industries. His administration expanded tax incentives for R&D investments and established the Ohio Industrial Sites Inventory to identify and prepare locations for new manufacturing facilities.

Long-term Impact

Manufacturing Adaptation (1975-1985)

As global competition intensified during the late 1970s and early 1980s, Ohio's decade-long commitment to industrial policy yielded significant advantages. The state's manufacturing sector underwent a different evolution than in our timeline, characterized by more gradual transition and strategic adaptation rather than wholesale collapse.

Steel Industry Transformation

In our timeline, the steel industry in Ohio experienced catastrophic decline, symbolized by mill closures like Black Monday in Youngstown in 1977. In this alternate timeline, while the industry still contracted, it followed a more managed transition. The key differences included:

Earlier Adoption of Basic Oxygen Furnaces: With OIFA financing and technical assistance from the Cleveland IMC, major steel producers like Republic Steel and Youngstown Sheet and Tube modernized their production facilities earlier. By 1980, approximately 75% of Ohio steel was produced using efficient basic oxygen furnaces compared to 60% nationally.
Mini-Mill Expansion: Rather than simply closing integrated steel mills, companies collaborated with the state to convert some facilities to electric arc furnace "mini-mills" that recycled scrap steel more efficiently. Nucor Corporation, which pioneered this approach in our timeline, established multiple Ohio facilities in this alternate timeline.
Specialty Steel Development: The Industry-Academic Partnership between Case Western Reserve University and the steel industry accelerated research into specialty steel alloys for automotive, aerospace, and medical applications. This higher-value production partially offset the decline in basic steel manufacturing.

While steel employment still declined significantly (approximately 40% between 1975 and 1985), this represented a much better outcome than the nearly 70% decline experienced in our timeline.

Automotive Manufacturing Resilience

Ohio's automotive sector demonstrated even greater resilience in this alternate timeline:

Component Specialization: With guidance from the OIFC, Ohio's automotive suppliers strategically specialized in higher-value components requiring precision engineering. This strategy positioned them to supply not just domestic automakers but also the Japanese transplant factories that began appearing in the early 1980s.
Earlier Robotics Integration: The Dayton IMC established the Automotive Production Technology Center in 1976, which helped suppliers integrate robotics and automation more systematically than in our timeline. This improved quality control and productivity while maintaining a skilled (if somewhat reduced) workforce.
Alternative Vehicle Research: The IAPP between Ohio State University and the automotive sector launched the Advanced Vehicle Research Consortium in 1978, which developed technologies for more fuel-efficient vehicles. These innovations proved particularly valuable after the 1979 energy crisis.

Rubber and Polymer Industry Evolution

Perhaps the most dramatic alternate path occurred in Akron's rubber industry:

Strategic Pivot to Advanced Materials: Rather than watching its tire production migrate overseas, Akron transformed into a global center for polymer research and advanced materials development. The University of Akron's College of Polymer Science, established in 1975 in this timeline (versus 1988 in our timeline), became the nucleus of this transformation.
Retention of Corporate Headquarters: Unlike our timeline where companies like Firestone relocated headquarters, the alternate timeline's strategic advantages kept corporate decision-making in Ohio.
Materials Science Expansion: By 1985, Akron had established the Advanced Materials Corridor, which included research facilities, specialized manufacturing operations, and startup incubators focused on polymers and composites.

Economic Indicators and Demographics (1975-1995)

The economic trajectory of Ohio diverged significantly from our timeline:

Manufacturing Employment: While manufacturing jobs still declined from the 1969 peak of 1.4 million, the alternate timeline saw approximately 1.1 million manufacturing jobs remaining by 1985 and 950,000 by 1995—roughly 300,000 more than in our timeline.
Population Stability: Ohio's population grew modestly rather than stagnating. Cities like Cleveland, which lost 23.6% of its population between 1970 and 1990 in our timeline, experienced only an 8% decline in this alternate reality, with stabilization occurring by the late 1980s.
Income Levels: Per capita income in Ohio remained approximately 5% above the national average through this period, compared to falling below the national average in our timeline.
Industrial Diversification: By 1990, Ohio had developed stronger positions in emerging industries like advanced materials, medical devices, and computer-aided manufacturing equipment than in our timeline.

National Policy Influence (1980-2000)

Ohio's relative success amid deindustrialization transformed it from an industrial policy follower to a leader. The "Ohio Model" gained national attention as a pragmatic approach to industrial adaptation that bridged traditional political divides:

Federal Policy Adoption: Elements of Ohio's approach influenced federal legislation, including the Manufacturing Technology Transfer Act of 1983 (a fictional act in this timeline) which established a national network of manufacturing extension centers modeled on Ohio's IMCs.
Labor Relations Evolution: The collaborative approaches to technological change developed in Ohio influenced national labor relations. The "Productive Partnership Agreements" pioneered between Ohio manufacturers and unions became templates for labor agreements in other manufacturing states.
Presidential Politics: Ohio's economic resilience reinforced its political importance. Presidential candidates from both parties regularly cited the "Ohio Model" and promised to implement similar policies nationally.

Global Positioning and Trade Relations (1985-2005)

Ohio's manufacturing adaptations positioned the state differently in the global economy:

Trading Relationships: Ohio manufacturers established stronger export positions, particularly in advanced manufacturing equipment, automotive components, specialty materials, and medical devices. Trade with Germany and Japan became more balanced, with technological exchange flowing in both directions.
Foreign Direct Investment: The state attracted significant manufacturing investment from abroad, becoming a preferred location for European and Japanese manufacturers seeking production capacity in North America. Toyota established its first wholly-owned U.S. manufacturing facility in Ohio rather than Kentucky in this timeline.
Globalization Approach: Ohio businesses developed a more sophisticated approach to globalization, often maintaining R&D, design, and advanced manufacturing domestically while establishing global supply chains for components and materials.

Technology and Innovation Ecosystem (1990-2025)

By the 1990s, the long-term investments in industrial research and university partnerships had created a distinctive innovation ecosystem:

Manufacturing Technology Leadership: Ohio established global leadership positions in several advanced manufacturing technologies, including industrial robotics, additive manufacturing (3D printing), and smart manufacturing systems.
Research Concentration: The state's universities developed specialized research strengths that attracted global talent. Ohio State University's Center for Advanced Manufacturing (a fictional entity in this timeline) became one of the world's leading research institutes for manufacturing technology.
Startup Dynamism: The industrial policy framework evolved to support manufacturing entrepreneurs, with specialized venture capital funds, incubators, and technology commercialization programs. This ecosystem generated more manufacturing-focused startups than in our timeline.
Digital Manufacturing Integration: When digital manufacturing technologies emerged in the 1990s and accelerated in the 2000s, Ohio was well-positioned to integrate these innovations into its industrial base. The state became a pioneer in Industrial Internet of Things (IIoT) applications.

By 2025 in this alternate timeline, Ohio remains one of America's manufacturing centers, with approximately 850,000 manufacturing jobs—still below the 1969 peak but significantly above the approximately 680,000 in our present reality. More importantly, the nature of these manufacturing positions has evolved, with higher productivity, wages, and skill requirements than the industrial jobs of the 1960s.

Expert Opinions

Dr. Margaret Chen, Professor of Economic History at Stanford University, offers this perspective: "The fascinating counterfactual of Ohio implementing forward-thinking industrial policies in the 1970s reveals how path-dependent industrial development truly is. What makes this alternate timeline particularly compelling is that it doesn't require vast ideological shifts or cultural transformations—just a modest recalibration of priorities and timing. The policies that Ohio might have implemented weren't radical by global standards; similar approaches were being used successfully in countries like West Germany, Japan, and Sweden. The tragedy of American deindustrialization wasn't its inevitability but its particular form and pace, which devastated communities unnecessarily and squandered industrial capabilities that took generations to build."

Richard Longworth, Senior Fellow at the Chicago Council on Global Affairs and author of "Caught in the Middle: America's Heartland in the Age of Globalism," provides this analysis: "What's striking about this alternate timeline is how it might have reshaped not just Ohio's economy but its politics and social fabric. The extreme polarization we see today in former manufacturing regions stems partly from economic trauma and the sense that communities were abandoned to market forces. A more managed industrial transition could have preserved not just jobs but social cohesion and institutional strength. I'm particularly intrigued by how this alternate approach might have reshaped labor relations. Rather than the adversarial collapse we witnessed, we might have seen the emergence of a more collaborative model akin to German-style works councils. This could have created an entirely different political economy for the American Midwest."

Dr. James Wilson, Director of the Center for Regional Economic Development at Ohio State University, suggests: "This counterfactual highlights something often overlooked in discussions of industrial policy—timing matters enormously. By the time most Rust Belt states implemented serious manufacturing retention and modernization programs in the mid-1980s, many core industrial assets had already been lost or compromised. Starting a decade earlier would have allowed interventions when the industrial base was still fundamentally sound but needed strategic reorientation. The alternate timeline also illustrates how industrial policy isn't about preventing all change—Ohio's manufacturing sector still transforms significantly in this scenario—but rather about managing transition to preserve capabilities while adapting to new competitive realities. The question isn't whether industries will change but whether that change occurs through chaotic destruction or strategic evolution."