Tesla plant could spur labor boom

Construction of Tesla’s multi-million-square-foot battery production plant at Tahoe Reno Industrial Center is expected to employ thousands of construction workers, and that could help rebuild a large portion of the cadre of skilled tradesmen who left the area through the recession.

Construction employment in the Reno-Sparks metropolitan region stood at 11,400 in August, the Department of Employment, Training and Rehabilitation reports. Construction employment was 22,300 in July of 2007 before the bottom dropped out of the building trades.

That lack of available labor hasn’t posed too many problems for contractors during the lean years, but with the volume of work in Reno-Sparks steadily increasing, especially in the industrial and residential sectors, regional construction firms are starting to feel the effects of an industry-wide shortage of skilled labor.

Craig Willcut, president of United Construction, has added several key members to his staff in the past few months, but Willcut says he’s worried about the overall shortage of workers to handle the steady rise in work in the Truckee Meadows even without the Tesla project coming online — and pressure to find construction field hands certainly won’t get easier once the Tesla project goes vertical next year.

“I hope it actually brings back workers that left during our downturn because we are already in short supply,” Willcut says. “I am worried about workers in the trades themselves; that is one of our biggest concerns. Are their going to be enough to handle the workload without a Tesla?”

Willcut is confident that United’s long-standing ties with its preferred subcontractors guarantees the company will have plenty of staff on its forthcoming jobs. The subcontractors hired to perform work at the Tesla battery factory most likely will use the majority of their regional workforce and also have to bring in labor from out of state, he notes.

The sheer scope of the plant — 5 million or more square feet — ensures that the many different subcontractors on the job will be forced to increase their payrolls. And short supply coupled with a spike in demand could lead to wage hikes as contractors seek to retain or increase staff size. Willcut points to North Dakota, where the oil-boom led to above-scale wages. Buildout of plant “will impact construction and development in our region for a long time,” he says.

The factory has the potential to move the needle in other key areas, most notably materials availability and pricing. Expect one of the three regional concrete producers — 3D Concrete, American Ready Mix or Cemex — to be running at full capacity and quite possibly collaborating to meet demand. The same can be said for suppliers whose goods are too heavy to travel far, such as structural steel and steel roof truss manufacturers.

To give you an idea of the scope of the project, Tom Herschbach, general manager of American Ready Mix in Sparks, says preliminary estimates for the plant call for between 150,000 and 250,000 yards of concrete. American Ready Mix supplied concrete for SanMar’s new distribution facility under construction at Spanish Springs, and the large 750,000-square-foot building required 23,000 to 25,000 yards of concrete for the floor slab and tilt-up walls.

For the most part, Reno-Sparks contractors and suppliers still are in the dark regarding the overall size and construction plans for building out the facility, but they agree that it would be the single-largest vertical construction project ever undertaken in Northern Nevada.

“Potentially, it could take up a lot of our daily work,” Herschbach says. “If it were the bigger number (250,000 yards of concrete), and they wanted to do it as one big project and not put it out in three or four separate buildings, then that is a big number for any ready-mix producer to manage. Right now we don’t know what the specs are, so we don’t know what the demand is going to be, but either way it will be great for producers and we are definitely excited about it.”

Possible scenarios for supplying the job with steady stream of concrete include setting up a batch plant onsite or transporting mud from the American Ready Mix headquarters on Greg Street with overflow from its operations in Fernley — but that brings up the challenge of having enough qualified drivers to run trucks almost non-stop. American has rented out trucks from other producers in the past, Herschbach notes.

“Everybody is going to have to get qualified employees to accept this work. If they are adding employees to deliver concrete to the site, that is a big concern with all construction ramping up — are there going to be enough qualified drivers to handle this potential increase in output?”

Lance Semenko, chief operating officer for Q&D Construction, knows a bit about big jobs — he led Q&D’s general engineering division when it was a joint-venture partner on construction of the 1 million-square-foot facility for IGT in South Meadows. The Tesla project could be 5 times that size or larger once construction blueprints are finally established.

Staffing the workforce for the IGT buildout wasn’t the challenge, Semenko says, since Q&D dedicated the lion’s share of its workforce to the project. The stickler was having enough qualified hands to handle all of Q&D’s other projects going on at the same time. The same scenario might play out next summer for various companies when their crews descend on Tahoe Reno Industrial Center for the Tesla project.

“It is going to bring about a shortage of people, not just because of that project but because of everything else that we see and feel is going to happen around here,” Semenko says.

At 545 employees, Q&D has recovered less than half of its pre-recession workforce of 1,200, though it’s well above its skeleton crew of 180 employees during the depths of the downturn.