Manufacturing jobs a growing part of northern Nevada economy

Posted at: Jan 5

 

Motorists headed for Lake Tahoe along Fairview Drive in Carson City probably don’t pay much attention to the Ametherm Inc. plant as they pass by.

But the maker of thermistors used in electronic equipment has doubled its production in the past year as it nailed down new distribution agreements, made the strategic acquisition of a product line and moved into a new facility.

“We’ve experienced amazing growth over the past year — both organically and through acquisitions,” says Eric Rauch, president and chief executive officer of Ametherm.

His company’s growth is part of a trend that’s seen the addition of 1,400 manufacturing jobs statewide in the last year — a growth rate of 3.4 percent.

State officials expect manufacturing employment to grow dramatically in the next couple of years, both as the result of the 6,000-worker Tesla battery plant as well as the arrival of numerous other manufacturers.

Even before the Tesla announcement, northern Nevada was getting a close look from manufacturing companies who were considering new facilities in the region.

Manufacturing jobs accounted for about two thirds of the companies other than Tesla that were assisted by the Economic Development Authority of Western Nevada during the second half of the year.

Rob Hooper, executive director of Northern Nevada Development Authority, says advanced manufacturing and technology companies accounted for most of the inquiries coming into his office recent months.

That’s not a coincidence, says Mike Kazmierski, EDAWN’s president and chief executive officer.

EDAWN’s leadership believes that northern Nevada is well-positioned to take advantage of companies that are returning their manufacturing operations to the United States as they seek lower transportation costs and faster speed to market than what they’ve found with Asian operations.

That gets a further boost from nearby California, a giant market for manufactured goods but a daunting place for manufacturers to set up shop.

“We are the advanced manufacturing hub of the West,” says Kazmierski.

But while the arrival of new manufacturing operations diversifies the region’s economy, it’s a mixed blessing for existing manufacturers.

A consistent worry is recruitment of skilled workers — or, in some instances, workers who show up at all, says Kris Holt, executive director of Nevada Business Connections, a privately funded business development organization based in Carson City.

“It’s slim and none out there,” says Holt, who visited with about 70 manufacturing executives in the past 90 days.

And that leads to mixed feelings about the arrival of Tesla’s gigafactory at Tahoe Reno Industrial Center. Some manufacturers, Holt says, welcome the major boost that the Tesla operation will bring to the region’s economy. Others worry that about increased competition for workers once the 6,000-employee Tesla plant is rolling.

Another concern is power costs. Holt says 70 percent of the manufacturing executives he interviewed this autumn believe that their electricity rates are higher than other nearby markets.

NV Energy says that concern is misplaced.

A study by the utility through August finds that northern Nevada’s average retail price for industrial customers was 8 percent lower than prices charged in the Mountain states, 26.9 percent lower than the Pacific states, and 12.2 percent lower than the U.S. average.

“NV Energy’s electric rates in northern Nevada compare quite favorably with the prices in neighboring markets,” says Mary Simmons, vice president for business development and community strategy for the utility.

Quality of life in northern Nevada is particularly important to many manufacturing executives, especially those at the many family-owned companies in Carson City and Mound House.

“They care where they live before they care where they work,” says Holt.

The region’s cost of living also provides a strong drawing card to manufacturing companies that are thinking about moving from more-expensive environments in California, Portland and Seattle, says Holt, who has recruited heavily in all three markets.

The rebound of the region’s manufacturing sector is helping it recover thousands of jobs lost during the recession.

“They’re thriving. They’re feeling upbeat,” says Holt.

A study commissioned by the Nevada Governor’s Office of Economic Development finds that Washoe County lost 9 percent of its manufacturing jobs between 2004 and 2014. Carson City lost 16 percent of its jobs in the sector.

And those jobs are an important foundation for the region’s economy.

Manufacturing workers in Washoe County earn an average of $69,196 a year, and their counterparts in Carson City earn an average of $65,689, the GOED study found.

 

Courtesy: John Seelmeyer - Nevada Appeal