"The move to Reno is giving us credibility in the international market," says Joe Dutra, president of Kimmie Candy, which brought its factory back from Korea to set up in Reno.
"Although it costs more, the concept of the U.S.
market suggests quality." Adds Vio Monia, president of Momar Industries, which relocated to Reno from San Jose,"Customers prefer to buy domestically.
The typical lead time to buy overseas is six to 10 weeks."
But it's still an open question whether the flow of manufacturing to Nevada is anything more than a short-term trend.
Manufacturing will move back on shore due to fuel costs and rising overseas labor and energy costs, Dutra predicts.
Monia,whose company makes plastic products such as lids for food containers for a number of national customers, says he's already seen companies bring plants back from Mexico.
"It was too difficult to deal with the unskilled labor there,"he says.
As manufacturers come back, they give Nevada a good look.
"You can't run a business in California anymore," says Dutra."The relative manufacturing costs are too high.We saw it getting worse, not better."
The company had lost several major customers when it was headquartered in Sacramento, but regained them after the company cut costs with its move to Nevada.
Now Dutra is adding entertainment to the manufacturing mix, planning to bring people into the candy plant on tours to see how the product is made.
Then he'll turn the tourists loose in a retail boutique.
Despite some positive trends,Ray Bacon, executive director of the Nevada Manufacturers Association, says,"Long term, I don't see a home for manufacturing the U.S." Lawsuits are one factor.
"Litigation costs are so high that a lot of people are getting out of the machining business," he says."In product defect lawsuits, juries have awarded damages against the makers of machines as much as 70 years old.
Statistics show that in California, one in 17 workers are lawyers."
But bigger factors are lower costs offshore and tight labor supplies in Nevada and elsewhere.
"There are too many spots in the world where standards of living are much lower," Bacon says.
In Nevada,meanwhile, the labor market is tighter than a post-buffet waist band.
"Across the board, every company is in a hiring mode.
They'll be limited in how fast they can expand due to labor shortages,"Bacon says.
To compete, companies are focusing on increased productivity, says Bacon."The best way to compete against China is with increased productivity."
