Recently, Amonix, a government-supported solar plant, laid off more than 200 of its 300 employees at its manufacturing plant located on North Pecos Road.
It should be noted that many of the 300 employees on Amonix’s payroll were former construction workers. Amonix found that retraining the construction workers was a straightforward process; they already had easily-translatable skills that lent themselves easily to the manufacturing industry.
The $18 million Amonix facility only opened in May 2011, and a little over 6 months later, they slashed their workforce by a huge 66%. Somebody’s profit and loss figures had to be WAAAAAAY off…
Here’s where things get interesting: in 2010, Amonix received almost $6 million in government supported federal stimulus funds (through the American Reinvestment and Recovery Act) along with an incentive package that included significant sales and business tax breaks. The company was also financially backed by private capital to the tune of $12 million. One of the conditions for receiving the government’s stimulus funds was that Amonix employs an average of 300 people in five years. So in a way, it’s understandable that Amonix would optimistically choose to meet their workforce quota right out of the gate.
Not so understandable is that Amonix wasn’t able to maintain that workforce quota so soon after its openng. Laying off most of Amonix’s employees only scant months later more than hints at a bigger issue. Perhaps more time should have been spent on how to manage cashflow, rather than on how to get the funding.
If Amonix ends up not maintaining an average workforce of 300 employees, they owe the state money back. That’s all fine and dandy, but if Amonix is REALLY out of true five years from now, how exactly would Nevada (and taxpayers especially, since we ultimately fund stimulus funding) collect on that debt?
Following the massive layoffs, Amonix is understandably
panicking retooling and claim that they’ll be hiring again eventually.
Amonix is just one case study: how many other companies have tapped into government-sanctioned funds, only to have to do some major “retooling” after the money’s in the bank?
Instead of funding companies that might be ill-prepared to manage their cashflow, wouldn’t that money be better served to fix some of the real underlying problems that Nevada faces? For example, when it comes to the renewable energy industry, Nevada is attracting many manufacturing hubs, such as Amonix, but we’re not attracting enough renewable energy-related company headquarters. And there’s no reason why we shouldn’t be: geographically-speaking, Nevada is in a prime location, and we could easily become a major hub connecting solar-related companies in California, Arizona, Colorado, Utah and New Mexico.
Money could be better spent towards company headquarters recruitment.
As well, it’s common knowledge that Nevada lacks a trained workforce in certain specialized industries; however, as the Amonix case study shows, retraining employees with translatable skills is a creative solution that may be more cost-effective than training an entire workforce from the ground up.
Incidentally, Governor Brian Sandoval was present at Amonix’s plant opening in May of 2011, when the future (all of seven months ago) for the company seemed so bright. It should be noted that Brian Sandoval’s new economic development plan recently unveiled (all of 7 months later) now attempts to address the trained workforce issue and current shortcomings in company headquarters recruitment activities.
Should have thought of that seven months ago, Bri.
Another area that could use some government-sanctioned cash flow is in the assets department. Nevada lacks enough renewable energy-related manufacturing materials (a fact which turned out to be a major fly in Amonix’s ointment). Break us off a piece of that government-sanctioned, incentivized kit kat bar to help solve this problem, and we’d be a shoe-in for becoming leaders in this important industry. We already have the prime location and the potential workforce, so in a very real sense, we need the actual tools to make it happen.
Born in France and raised in SoCal, Dorian Issock’s reviews, blogs and other literary tidbits appear in Desert Companion Magazine, The New Colonist, Urban Art, and scores of online destinations across the internet.