Four segments of the economy take raw materials and turn them into things: mining, agriculture, construction and manufacturing. Of those, manufacturing may be the one that works the most with the others, from food manufacturers to construction (on-site manufacturing) and mining. Ray Bacon, executive director, Nevada Manufacturer’s Association, said, “If you wanted to barbecue and someone gave you a ton of bauxite, you’d be nonplused. But if they gave you a great new aluminum grill, you’d be happy as a lark.”
That’s manufacturing, and it’s changed. Gone are the days of oil and grease, dark warehouses and giant wrenches. Manufacturing today requires high tech skills from a well-trained workforce and produces little waste.
It’s a perfect industry for Nevada.
Nevada is a perfect state for manufacturing.
Manufacturing in Nevada
“Nevada is a good match for manufacturers,” said Somer Hollingsworth, president/CEO, Nevada Development Authority (NDA). The cost of power is fairly low, compared to other states, and workman’s compensation insurance rates have gone down steadily for the last seven years; California is poised for another cost hike.
According to Bob Cooper, economic development/redevelopment manager, City of Henderson, industry agencies like Aniello Insurance Agency will sit down with manufacturing company execs to find the best workman’s compensation rates.
“We already have a little bit of everything in manufacturing,” said Hollingsworth. “We can have everything from injection molding to manufacturing products R&D and design the company came up with and patented. If you look at an economic model of manufacturing, because of the supply chain, it has the largest multipliers of any industry out there. It’s a good industry for us, they have good wages and good medical benefits.”
Nevada has the supply chain.
Nevada, logistically and because of location and infrastructure, is the distribution hub of the 11 western states. From Northern Nevada, the Oakland ports, Northern California, Oregon, Washington, Idaho and New Mexico are all accessible. East/west, I-80 runs coast to coast, and along the I-80 corridor are industrial parks. In Southern Nevada, Southern California and Arizona are accessible along I-15. The Nevada highway infrastructure creates a western mega-region.
Southern Nevada imports most of its consumables, because there’s no grocery distribution operation in the Las Vegas Valley. Groceries are trucked in from a distribution center located in California, and because otherwise trucks would deadhead back empty, shipping product out of Southern Nevada is really, inexpensive.
It’s also 24/7. “Need a truck out Saturday night it’s no big deal,” said Cooper. “California offices are Monday through Friday, so they’re shut down. We don’t ever shut down, call a truck at 10 p.m. to be on my dock, can you do this? No big deal. Sunday afternoon? Sure.” That kind of responsiveness and cost-cutting hub mentality fits manufacturing.
Manufacturing isn’t new to Nevada. Henderson was formed as a manufacturing town, producing magnesium to support the war effort during World War II. Congress needed a facility, said Cooper, and chose to create a smelting plant in Southern Nevada. “Today there are four or five different components to it. It’s an extremely large facility with electronics and people not manufacturing magnesium, we manufacture titanium used in the aerospace business.”
Today when everything from ice cream to aerospace components is manufactured in Southern Nevada, Cooper said, “I think our industrial market in real estate is over 12-million-square-feet in industrial manufacturing space.”
A manufacturing company doesn’t stay successful, and stay in business, unless it is continually improving quality and reducing cost, states Bacon.
Nevada Industry Excellence (NVIE) helps manufacturers make improvements. NVIE is the industrial outreach program of Nevada System of Higher Education, tasked with helping Nevada manufacturers become more globally competitive and profitable by working with talent from Nevada universities and community colleges, and tried-and-proven third party providers.
“We work with the economic development folks by sitting down at the table with companies seriously considering Nevada. We’ve been able to assist them in picking locations and when they move, to set up production facility in the most lean fashion possible. They have to start from scratch in the production line and set up equipment in the right location so that the flow goes smoothly and efficiently through the operation. The savings they can realize in improving upon their existing manufacturing facility in some cases can literally pay for their move when they come to Nevada,” said Culp.
Partnerships make Nevada a great place for manufacturers to do business. Nevada Commission on Economic Development (NCED) is one of the first stops for companies looking at Nevada – and one of the first partnerships incoming companies might form.
NCED looks to be an employment office and training partner for businesses because the single largest startup cost outside building or operating a factory is finding and training workforce, according to Frank Woodbeck, director of Las Vegas operations and workforce initiatives, NCED.
“Fifteen minutes ago we were talking to a company in Hawaii about moving here and they’re going to need 150 employees,” said Woodbeck. “We’re sending them a spreadsheet of people and categories and salaries. There is a lot of training needed for their estimates and how long it will take.”
Then the partnering begins. NCED contracts with NVIE to be the primary training company. The Train Employees Now fund (TEN) involves short-term, skills-based, job-intensive training funded by DETR, and NCED works with NVIE to write training plans and conduct training. “They’re a major asset in that supply chain because you need that customer interface, someone to sit with a company and understand training needs and write the curriculum and make sure quality of instruction meets or exceeds client expectations,” said Mike Skaggs, executive director, NCED.
“We have never had a manufacturing company have a problem finding the people that they needed immediately or people they wanted to train,” said Hollingsworth. “When Amonix® wanted to train their people here, they could get 4,000 training dollars per employee and that’s wonderful.” Across the country companies are searching for dollars to train employees.
University of Nevada, Las Vegas, is another authorized employee training partner. UNLV’s College of Business works with economic development authorities to provide economic and business research and sophisticated forecasting to help companies do more with less, whether it’s less money, less time or fewer employees.
Other partners include Nevada Manufacturer’s Association, a membership-driven trade association that pools talents and voices to work with state and federal government for common interests.
Northern Nevada Development Authority is a four-county region including Carson City, Douglas, Storey and Lyon Counties, and center of the manufacturing cluster for Nevada, according to Rob Hooper, executive director. NNDA and NVIE brought together the Manufacturer’s Collaborative, a group that meets monthly to examine common problems and create cooperative solutions.
One of the problems identified was workforce skills, so the group partnered with NVIE and Western Nevada Community College to create a certification program. In October 2011, partnership with NVIE will lead to the first ROI – return on investment – conference, teaching manufacturers to focus on the bottom line through manufacturing processes, technology and exporting.