Precision Valves rides out turbulent times

Kevin Huffer operates his business with one guiding principle.

"Never think you've got it wired," he says.

He recalls well the day he received a phone call from a friend who owned a business that had been producing sales in the hundreds of thousands of units annually.

"We were on the phone for three hours as I listened to how his market had virtually disappeared overnight, and he didn't know how to get it back.

The guy's company produced phonograph needles.

He never saw the compact disk market coming.

He was devastated," says Huffer.

Huffer owns Precision Valves, a Renobased company that provides hydraulic servo-valves, sleeves, slides and spools aimed at the aerospace industry.

Since the company's inception some 40 years ago, it has produced products for the Lunar Rover in the 1960s to today's Space Shuttle program.Two of the company's major customers are Parker-Hannifin's controls division in Ogden, Utah, and The Boeing Co.

in Seattle.

"Aerospace is our bread and butter," says Huffer, who relocated the company to Reno in 1995 from Southern California.

"But it has suffered over the past several years.

Manufacturing is a fluid industry.

Who could have foreseen the collapse of the Soviet Union and the subsequent decline in demand for fighter aircraft? Who could have foreseen the events of 9/11 and what it did to the airline industry?

"I try to learn from the lessons of business life.

I always look at the industry I sell to.

I try to spot trends and make whatever adjustments necessary," he says.

This is why his small workforce has declined from 10 to seven employees.

Forty percent of Precision Valve's product finds its way into the commercial aircraft market while the rest is aimed at the military.

The company has several "sub tier" suppliers in Southern California which means Huffer is back in Orange County at least once a month where much of his marketplace is concentrated.

"Most predictions are that it will take 18 to 24 months for a pick-up in our commercial aircraft business," he says.

Following 9/11, Huffer says about 3,000 aircraft were grounded.

About half will never come back into service because of their age and, therefore, there will be no need for an overhaul of those aircraft hydraulic systems.

"That means we won't be supplying those valves," he concedes.

Huffer says he relocated to the Truckee Meadows for two reasons.

Reno is central to his major customers in Southern California, Utah and Washington State.

The second reason is lifestyle.

"I had several visits from economic development people to relocate my business here," he says.

"Everyone was armed with tax numbers, rental rates and the like.

That's OK for a large business, but for the small business owner, I think it misses the point.

Find out first what that owner's personal interests are and then go after them.

My personal interest was skiing and the fact I could have a home three times the size of the one in Southern California for less money.

"Economic development recruiters also need to battle the idea that Reno is all about casinos," Huffer says.

"We are not Las Vegas.

There is a quality lifestyle that needs to be accented."

Huffer believes most large manufacturers today would not relocate to the Truckee Meadows because there are not enough support businesses in place.

"I'm talking about a company that might employ 500 or so people," he says.

"What has to occur is get those smaller support companies that will employ 10 to 20 people.

Perhaps I am wrong, but I just have not seen a strong push to attract such businesses.

I think it's more a lack of attention than it is by conscious design."

California's onerous business costs are already causing some smaller service industries to look elsewhere and when the state's new worker's compensation law becomes effective in January 2004, Huffer believes many more will be interested in hearing from Northern Nevada economic development relocation specialists.

One target, Huffer says, could be a certified heat-treating facility.

"There are none here in Northern Nevada," he says, "and I think that would be a big draw for a lot of manufacturing firms."