Made in Nevada: Manufacturing in the Silver State

Corrine Casanova

by Corrine Casanova

Tim and Randi Reed are the owners of Haus of Reed, a custom furniture company working with solid wood, metal and glass fiber reinforced concrete (gfrc). All of their materials are not only made in America, but over 90 percent are sourced within two miles of their facility. They moved into their current Greg St. location in Sparks two years ago. They were fortunate to lease space in a building that worked well for them despite not a lot of leasing options. Today, commercial real estate vacancy rates are at an all-time historical low and small manufacturing businesses are having difficulty finding space to lease.

According to NV DETR, there are 2,300 manufacturing businesses in Nevada. Manufacturing is 3.3 percent of the statewide total workforce and growing. In 2016, manufacturing became the third largest industry in Nevada, just behind gaming/tourism and logistics. Besides a facility to conduct business in, often the two biggest challenges with any manufacturing business is hiring qualified skilled employees and being mutually dependent on other manufacturing firms in and across sectors. Most manufacturing companies in the U.S. are small (fewer than 500 employees). According to the U.S. Census Bureau, 75 percent of these companies have fewer than 20 employees. Recruiting a skilled workforce is a challenge that both big and smaller companies face. Companies like Panasonic hit the recruiting hard with their many job fairs in and outside of Nevada but won’t hire unless the person is a right fit for their culture.

For the Reeds, they too want their employees to be a good fit for their culture. In addition, people who apply to work in the shop are asked to complete a design challenge prior to being hired. As Tim comes from six generations of wood workers from the Pacific Northwest, he prides himself on superb quality and has that same expectation of his employees. Randi explained how the design challenge works, “We give them a paper and pencil, instruct them what to build, provide material to do it and give them four hours to build, plan and then present to us. We do it because we want to know if they can think outside the box, work under pressure and produce a quality product. We can teach them how to work with metal and concrete but woodworking is a skill that is honed over time. People either crack under pressure or excel. We need to know they can work under time constraints and deadlines.” And their hiring philosophy seems to be working. Most recently, they were named SBA’s Microenterprise Business of the Year for 2017.

State 36 Clothing Co., an apparel company, is another small local business that is made in Nevada. Morgan Gottier started her clothing line as a tribute to her grandfather’s passion for Nevada. Her great grandfather came from Utah to Reno in 1917. Her daughters are fourth-generation Nevadans. While she and her husband, Brandon, had options for leaving Nevada after graduating from UNR, they chose to stay and are happy with that decision. As a small business owner and proud Nevadan, Morgan strives to keep as much of her business local. While she has to venture out of the region to purchase the apparel, she works with a local graphic designer and local print shop. She believes that within the next five years there will be a large clothing apparel manufacturer in the area thereby helping the supply chain of small businesses like hers.

The Northern Nevada Appeal

In January, National Geographic named Reno one of the top ten best smaller cities in the United States. The scoring was based on unconventional metrics that lead to happiness. Sharing the benefits of Northern Nevada is not a hard sell. The Northern Nevada Development Authority (NNDA) knows this firsthand as they are active in helping businesses of any size get started or expand in the Sierra Region of Nevada: Carson City, Douglas County, Lyon County, and Storey County. Their whole philosophy is connecting and facilitating businesses. Manufacturing is a big part of this.

NNDA President and CEO, Robert “Rob” Hooper explained how manufacturing has grown in the state, “The manufacturing cluster is beyond critical mass. It has become its own magnet. We are constantly seeing inquiries from large manufacturing firms looking to expand to here. We are still going to get some smaller businesses that will relocate here, but I think you will see more larger manufacturing facilities come here in an expanding role at a fairly rapid rate. We are in a critical spot as far as commercial industrial space is concerned. Since 2010 in the Sierra Region, we have gone from a 26 percent industrial vacancy rate down to below three percent. The types of manufacturers looking to come here are those who have the capabilities of building their own facility or having a build to suit done.”

Lynn O’Mara, NNDA Director of Economic Development, added, “Forty percent of manufacturing done in the state is in northern Nevada. Our state capital is not simply a state capital. A lot of manufacturers are located in Carson City and it considered to be the densest manufacturing city per capita meaning they have more residents that are employed by manufacturers than anyone else in the state.”

Growing a Diverse Workforce

Just as Panasonic has been growing a diverse workforce through their Panasonic Pathway Program (P3) with TMCC, another community college, Western Nevada College, has a certification program that focuses on automation. According to Hooper, “Western Nevada College is the only college west of the Mississippi River to have a Siemens Mechatronics Systems Certification Program (SMSCP) which is internationally recognized and teaches students how to live within the system of automation within the plant.” Certificate programs like the SMSCP and P3 benefit other manufacturing companies in the community too all creating a diverse workforce.

“Not only is the SMSCP certification internationally recognized, it is also equipment agnostic, which means it is not focused on Siemens equipment. One of the things to keep in mind is that the US Dept. of Commerce projects that over the next five to 10 years, 70 percent of the new jobs created will require nothing more than some type of certification, not a college degree. That means there is a lot of opportunities for individuals to get some kind of post-secondary education which they can build upon if they choose,” O’Mara said. Hooper sees the definition of college changing as people begin to learn high end technical skills in certificate programs, then go into the workplace and getting additional levels of certification. Hooper said, “Programs like these provide people an opportunity to get on some kind of career path, some of them may decide that they want a college education but can do it in incremental ways to determine if this is something they want to pursue. Employers now have a labor pool that they can utilize. As higher level jobs become available, they can work with those individuals who want to move up the chain.”

At the NNDA, Hooper and his staff are not only focused on helping companies come to the Sierra Region, but also working with companies that are already located here. They ask questions like:

  • How can we help companies find access to technology that increases productivity?
  • How can we connect companies to different types of markets?
  • How can we support companies that are expanding through tax incentives?

“You hear about all the tax incentives given to new companies that come here. Well, the very same tax incentives apply to companies that want to expand. Our workforce education, our access to capital, a lot of things we do is look at all aspects of support for our current manufacturing base,” said Hooper. For more information on NNDA, go to www.nnda.org. They have monthly breakfasts where manufacturers have the opportunity to meet each other in a networking atmosphere and discuss topics like building a diversified workforce and keeping their products made in Nevada.

A Presidential Sweet Adventure

Joe Dutra, owner of Kimmie Candy Company, chose to move his operations here from Korea in 2005. The manufacturing landscape in northern Nevada was much different back then. “My motivation for bringing an offshore production facility onshore was really to create American jobs. It got to the point where we needed to grow our business and either expand in Korea or come back to the US. That’s when I started looking at Reno. It was close enough to our roots in Sacramento. Reno has access to 63 million customers within a two-day transit, better insurance rates for workman’s comp, the taxes are lower and we discovered the weather isn’t as bad as we always thought it would be,” said Dutra. However, compared to California, there was no ready-made infrastructure here. There were no suppliers or packaging companies nearby,” Dutra shared.

“It turned out to be one of the best decisions I made business wise moving to Reno. At the time, the Economic Development Authority of Western Nevada (EDAWN) was recruiting companies to come to Nevada so Kimmie Candy became the poster child because we chose to move our offshore manufacturing onshore. EDAWN had a public relations agency from New York and I got free advertising on national television by being interviewed by major networks like CNBC and FOX. Each time I would say good morning from Reno giving us national exposure,” Dutra said.

Kimmie Candy produced nearly two million pounds of candy in 2016. In 2017 they moved from their 16,000 square foot facility to a 42,000 square foot facility where they have the ability to produce three times the amount of candy there. They bought the building on Edison Way and gutted it to expand their production capacity. They currently employ about 45 employees. Their dedication to Nevada has not gone unnoticed judging from the awards they have received. They were also the first candy company in 60 years to win the President’s “E” Award for Exports in 2016 and are the ninth ever Nevada company to win the award which was created by President John F. Kennedy. In July 2017, Kimmie Candy was selected to represent Nevada during “Made in America” week at the White House. A company from each state was chosen and Kimmie Candy was the only candy company represented. “President Trump sampled our candy and seemed to like it. He called us a sweet adventure,” Dutra shared.

The Northern Nevada Business Advantage

The Northern Nevada Development Authority (NNDA) sees the geographic location, Nevada tax structure, business and workforce incentives as advantages for Nevada business owners in the Sierra Region.

NORTHERN NEVADA GEOGRAPHICAL LOCATION

  • Logistic advantage – Reach 11 western states within a two-day ground transport

  • Proximity to major markets

  • Affordable lease rates

  • Low cost – Inexpensive to incorporate

  • Business Climate – Ranked in top ten as Best States to Do Business

  • Favorable tax structure

  • Accessible regulatory environment

  • Ranked #2 as small business and entrepreneurship friendly states

  • Economic development incentivesbusiness and training

  • University of Nevada, Reno ranked among top five business programs in the country

TAX STRUCTURE

  • NOCorporate Income Tax

  • NOPersonal Income Tax

  • NOInventory Tax

  • NOUnitary Tax

  • NOEstate and/or Gift Taxes

  • NOFranchise Tax

  • NOInheritance Tax

  • NOSpecial Intangible Tax

RIGHT TO WORK STATE

Employees have the right to decide for themselves whether or not to join or financially support a union. No person shall be denied the opportunity to obtain or retain employment because of non-membership in a labor organization.

To learn more, visit nnda.org.

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