As 'Stupid' goes, so Nevada grows

Though the housing market is still struggling, another side of Lyon County's economy is still going strong.

As of the end of 2007, Nevada's manufacturing industry now has 51,800 employees working in 2,038 businesses, and Mound House and Fernley are leading the charge in Lyon County.

Much, though not all, of the state increase is related to the recent mining boom, but Ray Bacon, executive director of the Nevada Manufacturers Association, said manufacturing has done well for a while, thanks to high costs of doing business in California.

"Even during the manufacturing recession of 2000 to 2003, manufacturing (in Nevada) gained 400 jobs while every other state lost jobs," he said. "It's not hard to look good when you live next door to Stupid."

Bacon appeared at the Dayton Area Chamber of Commerce Economic Forum recently, where he told a story of a Southern California manufacturer who wanted to put another plant only a quarter of a mile from his existing plant.

He spent seven years trying to get a special use permit, then one day took a trip to Las Vegas and looked around, Bacon said. That manufacturer bought property in North Las Vegas and was up and running with his new plant in seven months.

A better business climate is the reason Michael Fite relocated his business, Pacific Coast Flange, from Ukiah, Calif., to Mound House.

Flanges are the metal ring at the end of a pipe that connects it to another pipe or fitting, Fite said.

His large, 40,000-square-foot facility in Mound House makes flanges, imports flanges and alters them to customer specification and also operates as a machine shop. They range in size from two inches to 24 feet.

Fite said 2007 was the company's best ever, with volume up 38 percent.

"We deal primarily with the sewer and water industry," he said. "About 75 percent of what we do is sewer and water; the rest is gas and oil, which has exploded this year."

They also create flanges for wind towers, so they have a hand in alternative energy.

The company began in 1995 and moved to Mound House in 2004.

Fite said he came to Nevada to get relief from the workers compensation insurance and taxation costs in the Golden State, adding that 17 of the company's 31 employees moved with them. The company now employs 30 and expects to expand its workforce in 60 or 90 days, offering a competitive salary for machinists and machine operators, depending on experience, and health benefits.

Fite said the move to Nevada has worked well for him.

"We can deliver to Las Vegas or Los Angeles overnight, and Portland and Seattle in two days," he said.

Even the rising cost of fuel is more of a benefit than a hindrance, he said. As oil prices go up, so do shipping costs, but it's sparked a lot of domestic oil exploration and increased the demand for flanges.

"Volume is better, the cost of shipping is higher, but that's passed on to the customer," he said.

He said several of his customers have looked in the area for property, and moving to Nevada has been well-received by them.

"We can produce more economically here, and pass on the cost savings to the customer," he said.

Both Lyon and Storey counties are seeing industrial growth, Bacon said, with Storey's growth driven by the Tahoe Reno Industrial Center.

In addition, he said, Dayton is picking up and as soon as the privately-financed USA Parkway is completed, Silver Springs could take off.

"Silver Springs is at some point in time is gong to go nuts," he said. "The question is it going to be five years or 10 years or 25 years? I don't have a clue.

He said USA Parkway was the number one driver for industrial growth in Silver Springs, and once it is complete, people from Sparks would probably consider moving to the less expensive, more rural community.

Bacon said Dayton's industrial growth came to a screeching halt about 10 years ago when the federal Environmental Protection Agency decided they were going to tear up the Carson River because of mercury from the Comstock mining era.

"What mercury there is deep beneath the riverbed," he said. "It's been there for 100 years and it's probably going to stay there."

Environmental laws leave the property owner responsible for any contamination, Bacon said.

"When the problem is discovered you own the problem," he said. "You could have had nothing to do with creating it, but you still own the problem. No industrial company was going to buy one of those properties."

Not that Nevada industry doesn't have problems, Bacon said. Transportation costs are very high, there are not enough skilled workers and the state is ranked near the bottom in educational quality.

"If we truly had the quality of education that we should have, the number of jobs in the manufacturing and high tech sector would scare the hell out of anyone," he said. "We don't do a great job of education anywhere in the state. Clark County has 70 percent of the kids and they do a poor job."

But Bacon still said Nevada has not tapped out in terms of manufacturing.

"We are still going to wind up with companies that have a sizable portion of California clients that needs to be close to the California market but aren't crazy enough to put their plant in California," he said.

"So much of this has to do with what happens to Stupid next year," he said. "If they decide the way out of their budget problem is to do a dramatic increase in business taxes, I think you will see more companies leave. You tell me what Stupid's going to do and I'll tell you how much Nevada's manufacturing grows."