Canadian firms find currency and other advantages in Washington.
B
laine, Wash.'s motto is "Where America Begins." It could also be argued that Blaine is where the recent Canadian industrial invasion of the U.S. begins, or at least of Washington State. Blaine's northernmost city limit is the 49th parallel separating the Western U.S. from British Columbia, offering great proximity for Canadian firms seeking to be close to customers and better land prices.
Organic cereal firm
Nature's Path was the first major Canadian manufacturer to establish operations in Blaine and has more than doubled in size since 1999. More recently,
Golden Boy Foods, a Canadian manufacturer of peanut butter and nut products, set up operations in Blaine.
Jeff Gaskell, operations manager at Adventurer Manufacturing in Yakima, stands next to one of the first campers produced at the company's new location.
The latest southward migration involves
Viva Pharmaceutical, a Richmond, B.C., manufacturer of prescription drugs and nutraceuticals. The company, which will employ about 150, plans to build a two-story, 180,000-sq.-ft. (16,722-sq.-m.) manufacturing plant and office space.
RV Firm Pulls into Yakima
Blaine isn't the only Washington city benefiting from the recent influx from British Columbia. Recreational vehicle builder
Adventurer Manufacturing has moved its manufacturing operation from Abbotsford, B.C., to Yakima.
Adventurer management cites the declining U.S. dollar, a good labor pool and labor rate, available land, cheaper power and access to raw materials. Timing helped Adventurer ramp up its operations quickly as the company benefited from the April demise of Western RV in Yakima, which put 220 employees out of work. Adventurer's current manufacturing staff of 24 includes many Western RV veterans. The U.S. RV industry is hurting due to the economic downturn and rising gasoline prices, with several factories shutting down during the past year.
"A huge labor pool from an RV manufacturer was basically put in our lap," says Jeff Gaskell, Adventurer's operations manager.
Gaskell says Adventurer needed to expand and was unable to find adequate land in British Columbia. The company had to rebuild its work force nearly from scratch as its British Columbia workers did not want to relocate. But Adventurer didn't want to move too far away, and also considered locating in Oregon before choosing Yakima.
Washington has long had a thriving aerospace sector, and another company from Abbotsford is adding to the state's mix of companies.
Cascade Aerospace, a maintenance, repair and overhaul specialist, signed a 20-year lease for 353,397 sq. ft. (32,830 sq. m.) of facilities at Spokane International Airport, including a 250,000-sq.-ft. (23,225-sq.-m.) hangar.
“Given the current U.S. dollar situation, it makes more sense to have a U.S. site.”
Cascade secured US$2 million from the Washington State Community Revitalization Board, comprising a $1.7-million loan and $300,000 grant, and nearly $1 million from the airport and the City of Spokane to upgrade facilities. Like Adventurer, Cascade had run out of space.
"There was no more room at our facility in Canada, and given the current U.S. dollar situation it makes more sense to have a U.S. site," says Richard Massey, Cascade's director, quality control, quality assurance and training.
Cascade needed space to handle its commercial aircraft services. The company was awarded a C$423-million contract with the Canadian Air Force in 2006 to handle its fleet of C-130s, essentially taking up capacity at the Abbotsford facility.
Massey says a major attraction of the Spokane airport is the number of aircraft staying overnight, allowing time for MRO work. He says aircraft maintenance is a growing business, and that trend will continue with airlines reducing their fleets and keeping aircraft operating longer.
"The airlines are getting out of the maintenance business and are outsourcing maintenance work," Massey says.
Cascade also considered locating at Grant County International Airport in Moses Lake, Wash., a former Air Force Base and one of the largest airports in the U.S. Spokane had the edge, Massey says, due to the number of commercial aircraft staying overnight there.
Interactive Media Mecca
The Seattle area, known for iconic companies such as Starbucks, Amazon.com and Microsoft, has over the past several years quietly become one of the world's leaders in the interactive media industry. More than 150 companies or divisions involved in the video game sector are in Western Washington, employing more than 15,000. Employment has grown at a 33-percent annual clip since 2004. These jobs are lucrative, with game developers in the state drawing an average salary of $77,700 in 2006. The industry, which some observers describe as being "recession-proof," has an estimated economic impact on the region of nearly $5 billion.
Video game developer Hidden Path Entertainment is one of the more than 150 companies in the sector in the Seattle area.
The industry is anchored by Microsoft Gaming Studios and Nintendo, both located in Redmond. Other major companies include Big Fish, Real Games and PopCap Games. The sector also benefits from two major educational institutions that are leaders in interactive media development and training: the University of Washington and DigiPen Institute of Technology in Redmond. Interactive media in the Seattle area can trace its roots to both Microsoft and Boeing, the latter because of its use of flight simulators.
Jeff Pobst, founder and CEO of Hidden Path Entertainment, an independent game development firm founded in 2006, says the video game market's rapid growth rate figures to continue for many years. Hidden Path employs 33 and is close to releasing its first title,
Defense Grid: The Awakening.
"The entertainment value per dollar is much higher for a video game than it is, say, for a movie," Pobst says. "I'll go to a movie and maybe pay $10 for a two-hour experience, or $5 per hour. With a video game, I might pay $60 and I might have 40, 50, 60 hours of entertainment, a dollar an hour. It's much more cost-effective and it's always right at my fingertips. So, it's becoming more and more popular. At the moment all we see is growth and adoption."
Pobst says the Seattle-area industry accelerated as companies spun off from Microsoft and Nintendo.
"A lot of people came to this area, at least initially five to 10 years ago, to work for the two large companies," he says. "They spun off other companies that have become successful. There is a great quality of living here and a great talent of people. This area has the ability to support things that youth are interested in from a nightlife and urban perspective, and sports and entertainment. There is a great talent pool of artists, programmers and developers. You don't typically find all of those in one place, and this is one of those key places that you do."
Pobst believes Seattle ranks ahead of other North America video game hubs such as Vancouver, San Francisco, Los Angeles, Austin, Texas, and Boston in terms of quality of life.
"Of all the places to be, we find that Seattle is one of the easiest places to recruit people to if they are not already here," Popst says.