Christopher Rosacker

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March 4, 2013
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Nevada County's video tech industry in transition

Grass Valley, the video technology company, not the town, has consolidated its operations at its Nevada City campus into one building, according to the company’s spokeswoman.

While the facility shuffling may seem minor on the surface, the development comes as Sierra Video, another Nevada City video technology company, had its manufacturing department consolidated with its parent company’s headquarters in Israel and on the heels of a series of management changes at Grass Valley, formerly known as the Grass Valley Group.

“We are concerned,” said Nevada City Manager David Brennan. “What hurts us is we lose jobs. In losing jobs, that means money that could come into the community through salaries doesn’t circulate.”

Several times over the last two years, rumors of layoffs at Grass Valley’s local operations have circulated the community.

But as a private company, Grass Valley is not required to disclose many of its operations, and continued attempts by The Union to garner the information from Grass Valley or its employees have been unsuccessful. Even employees who have been laid off have declined to comment, citing concerns with their severance packages.

Only in July was one of those rumors confirmed, as 34 employees were laid off. The revelation was made public through a county memo relating to those employees being put in touch with One Stop Business and Career Center’s transitional job program.

Grass Valley spokeswoman Denise Williams told The Union that the facility consolidation does not include plans to lay off any Nevada City employees.

“I think we should be concerned about it,” said Robert Trent, executive director of the Nevada County Economic Resource Council and leader of Sierra Commons, a nonprofit that fosters small businesses.

Sierra Video was just one of a dozen video technology firms that sprouted from what was then called the Grass Valley Group, such as AJA Video, Ensemble Designs, Editware, NVision, Videoframe, Telestream and Renegade Labs.

“The Group has been huge in our community,” said Lew Sitzer, interim executive director of Nevada County Television, which runs the Nevada County Digital Media Center, a location subleased from Grass Valley.

“There is a lot of emotional sentiment involved with them,” Sitzer said.

As a company, Grass Valley is among the top 25 tax revenue generators in Nevada City, Brennan said.

“Sales fluctuate,” Brennan said. “Some quarters, they provide significant revenue. Sometimes, they provide none at all.” 

As a sector of the economy, business and industry, which includes video technology companies, is the fourth largest tax revenue source to the city, Brennan said.

The top three are fuel and service stations; restaurants and hotels; and general consumer goods.

“We recognized a shift in the business some time ago and have been executing on a clear strategy for the last 12 months to position the company to best address those new opportunities,” reads a statement sent to The Union in response to questions posed relating to the building consolidation.

“We are nearing the end of this transitional period,” the statement reads.

Part of that transition has also included a number of administrative changes with some involving former Grass Valley people returning to the company.

In January, Grass Valley brought back Tim Thorsteinson as the company’s new president and CEO, replacing Alain Andreoli, who was put into the position in January 2011 following Grass Valley’s acquisition by Francisco Partners, a San Francisco-based investment firm.

In late February, Grass Valley announced Stephen Wong as senior vice president of the company’s Asia Pacific Region and Mike Cronk as senior vice president of marketing — both former employees when the company was colloquially referred to as The Group.

Francisco Partners’ role in the decisions affecting Nevada City is unclear, but it poses a challenge to local decision makers.

“Those decisions are difficult to anticipate or be part of the conversation before it happens,” Brennan said. “When a decision is made, we have no ability to change that.”

Grass Valley’s spokespeople said that all the fluctuation is a natural part of its transition.

“(M)any of our products are now software-based and can run on enterprise-class IT platforms. As our total production volumes have changed, based on this shift to software, it has made less business sense to maintain a large manufacturing facility,” read the statement to The Union.

As part of the company’s ongoing strategy, Grass Valley has continued to look for ways to modernize and improve its supply chain, reads the company’s statement. Creating partnerships with other companies is one way of doing that, the statement reads.

The video industry itself is healthy, Grass Valley said, with more and more video being produced. Consumption is also up as video becomes more accessible on tablets and other mobile platforms, which means the company has opportunities in new product areas that one might not have previously associated with Grass Valley.

“Grass Valley has been outsourcing aspects of product manufacturing for more than a decade, and in June 2012, we transferred our test and assembly operations (from Nevada City) to a partner based in Florida,” reads Grass Valley’s comments. “Following that move, building consolidation was a natural next step.”

Grass Valley had occupied two buildings at its Nevada City campus, N3 and N4, Sitzer said. While N3 is where NCTV is housed, Grass Valley had housed its training there as well, Sitzer said.

Buiding N4 is reportedly the larger of the two buildings, with its own cafeteria, Sitzer said.

“There is still a real presence here,” Sitzer said. “It isn’t like they are going away. But they are in a state of transition.”

With the consolidation, Grass Valley’s engineering, research and development and training are under one roof. What will happen to the recently vacated space remains unclear.

“Things pull in, things contract, and sometimes it’s hard to see the big picture,” Sitzer said. “I am just hoping this is just a small contraction, and people will still want to do business here.”

So is Nevada City, Brennan said.

“We hope that if there is a vacuum created, somebody else will come in to fill that void,” Brennan said.

To contact Staff Writer Christopher Rosacker, email or call (530) 477-4236.

“It’s rewarding to have started a company from scratch and see it grow year after year.”

— Brian O’Looney, Carpet Pro owner

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The Union Updated Mar 4, 2013 02:59PM Published Mar 5, 2013 12:15PM Copyright 2013 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.