China target in manufacturing battle
January 26, 2014
Manufacturers from Western Nevada have Chinese rivals in the cross hairs if Nevada taxes or regulations don't spoil their aim, according to regional light-industry leaders.
"It's not as cheap as it was to manufacture in China," said Advanced Machining Technique's Frank Dutra at a Nevada Business Connections breakfast meeting. "I really think that Nevada could be a major competitor with China."
Dutra, who is also with Hubzone Manufacturing in California and Nevada, has moved some of his operations to Minden in recent years.
He said several original equipment manufacturers he deals with have bad experiences with Chinese work. Texas is a primary competitor with Nevada in the United States.
Gerd Poppinga and Sven Klatt of Vineburg Machining in Mound House, talked about expanding. They both came from Germany, and talked about their training and state-of-the-art machines while explaining Vineburg's survival to the current growth mode.
"I feel manufacturing is in a great trend right now," said Klatt, adding that Chinese industry no longer has an edge. Both Poppinga and Klatt talked about the importance of teaching young people advanced machining skills and other business matters related to light industry. Klatt said that from his perspective, a crucial factor is "major league machining or none."
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Also on the panel of manufacturers was Stephen VanDerver of Vital Systems in Reno, who said his company is about to add another work shift and many manufacturers see this as a time for optimism.
Panel moderator Ray Bacon, executive director of the Nevada Manufacturers Association, warned of problems that could still trip Nevada industry up over time.
"We can do on-shoring," Bacon said. "We can be competitive." He said China's wages go up 15 percent annually, and the Asia giant's industrial operations aren't efficient.
But he criticized a proposed Nevada margins tax on business and any altering of the state's regulatory environment in ways that would hamper Silver State firms, whether current companies or those transplanting to Nevada as the economy keeps recovering.
Bacon cheered the business breakfast audience by saying the state margins tax plan can be turned away when its fate is decided in November. He said signs indicate labor organizations with workers in the private economy won't or may not support the tax.
"This thing can be defeated at the ballot box," he said.
Nevada Business Connections is a private-sector economic development networking organization based in Northern Nevada.