Work force, air service hindering Nevada diversification

Brian Seals

Friday, May 15, 1998 | 10:31 a.m.

Gambling is Nevada's goose that laid the golden egg. But most agree the state needs to diversify its economy to withstand downturns in the gaming industry.

That may be easier said than done, however. While the state has a pro-business tax structure, it also has obstacles such as transportation woes, a largely unskilled labor force and the inability to offer incentives to lure businesses here.

That was the message from a three-man panel discussing economic diversification at a Las Vegas Chamber of Commerce seminar Thursday.

"The most difficult area we face as a business is lack of a skilled work force," said Michael Mackenzie, president of Trimm Technologies Inc.

Mackenzie said his company has to "import" its engineers and that is "very expensive." Also, he said the majority of the area's work force tends to be geared to the gaming-service industry and that a lack of skilled workers is a barrier to recruiting high-tech companies. He said his company has had to establish its own training center.

His sentiments were echoed by Donald Rager, president of Shelby American Inc., an automobile manufacturer, who said his company struggles to find welders and painters.

Both called for stronger partnerships between school districts, colleges and the business community. While programs such as School to Careers seek to do just that, Rager said there are still not enough students in technical programs and that many are lured to gaming industry jobs.

"It's a great program, but it needs continuity," Rager said. "Once they get out, they can get better opportunities. Usually that's offset by volume, but this program isn't that large."

Another obstacle to economic diversification in the Valley is air service that is geared to the tourist market rather than the business customer.

"It's difficult for a business traveler to get in and out of Las Vegas," Mackenzie said.

Somer Hollingsworth of the Nevada Development Authority said 26 vacant gates at the airport need to be filled and that emphasis should be placed on recruiting international flights.

Both education and transportation obstacles were labeled "chicken and egg" problems. If more high-tech and other industries located here, it would create incentives for more educational programs and air service to accommodate such industries.

Panelist also said Nevada is at a disadvantage because its Constitution does not allow for economic incentives other states offer, like low-interest loans. Hollingsworth told of getting outbid by Arizona for a company called Fox Animation after Arizona offered it a $10 million loan.

"We can't do that," he said.

Yet it's not all that gloomy. The panel discussed a wealth of possibilities. Mackenzie said his company has to buy its supplies out of state. He said a focus on recruiting suppliers conducive to the Las Vegas market to locate here would be a start.

Hollingsworth said NDA has already targeted several industries it would like to entice to Southern Nevada like automotive firms, the movie industry and communications. Movies filmed here are near commonplace, but NDA would like to see camera, wardrobe and animation companies locate here.

"It's very high-paying and very clean," he said.

Perhaps equally important, area business people need to get the word out nationally that Las Vegas is more than just a tourist destination -- that there are industries other than gaming here.

After all, both Rager and Mackenzie's companies relocated here.

"Those companies need to hear the Las Vegas story," Rager said. "The more you tell them, the better chance we have."