Cutters Edge moving global headquarters to Baker City
When the going gets tough, the tough move to
Baker City, where a new manufacturing plant is under construction by
Cutters Edge, makers of the toughest saws in the world for cutting
steel and concrete.
"Construction is scheduled for completion by the end of November and
we'll begin moving in the first week of December," said Tom Ruzich, who
founded Cutters Edge in Julian, Calif., in 1987 during one of the
nation's previous recessions.
Ruzich said he started looking for a new location about three years ago
after the largest wildfire in California's recorded history destroyed
three properties he owned. While his Cutters Edge plant in Southern
California escaped the fire, he said the ongoing fire threat, a labor
shortage and the soaring cost of doing business in a mountain resort
and retirement town one hour from San Diego prompted him to make the
move to Baker City.
Despite the financial market crisis, the Wall Street bailout, wild stock market swings and other economic ups and downs reported in recent weeks, Ruzich said worldwide sales of the super-tough circular cutting saws and chain saws manufactured by Cutters Edge are booming.
Ruzich invented the first of his lineup of nearly invincible carbon saw blades in 1984 while working as a forest ranger. Since then the carbon blades and even tougher diamond-tipped cutting blades and chain saws have been used all over the world by firemen, the military and rescue teams, including those who cut through concrete and steel rebar to extricate victims from the collapsed Twin Towers buildings in New York after the Sept. 11 terrorist attacks, the Oklahoma City bombing of the Murrah Federal Building on April 19, 1995, and other buildings damaged or destroyed around the world by terrorist attacks, hurricanes, landslides, earthquakes and other disasters.
"Our saws can cut through six-inch reinforced concrete to get victims out in 15 minutes," Ruzich said.
The $1 million manufacturing plant, administrative offices and training site nearing completion in Baker City will be the worldwide headquarters for Cutters Edge, Ruzich said.
That $1 million figure includes roughly $650,000 for construction of a 10,000-square-foot manufacturing plant with a two-story administrative offices section on the south side and a second-story storage area on the north side, according to Troy Phillips, the project manager for Cutters Edge. Phillips was formerly employed by Baker County as its economic development manager.
Phillips said the $1 million total also includes $350,000 to purchase manufacturing equipment, office furniture and equipment, as well as the 1.78-acre site of the manufacturing plant and another parcel in the Elkhorn View Industrial Park, where customers who purchase Cutters Edge saws will be trained.
Earlier this year, the company closed a manufacturing plant in Pennsylvania, and when the move to Baker City is completed in December, the plant and administrative offices in Julian will be closed and key personnel will be relocated to Baker City, Ruzich said.
"We are consolidating both factories in Baker City," Ruzich said. "The announcement we are sending out to customers says our new worldwide headquarters is in Baker City."
He said the company will employ nine or 10 people at the plant in Baker City in 2009, but the company's plans envision growth in sales, boosting employment to 17 in 2010.
Phillips said salaries for all workers is projected to average around $16 per hour.
"This business fits right in with what the county is trying to do for economic development and to create jobs," said Jerry Kincaid, a vice president and commercial loans team leader for Banner Bank, which opened its current branch in Baker City in 2006 and is looking for property in town to build a new branch.
Kincaid said Banner Bank is providing the construction financing for the project, but once the construction is completed, the bank will carry a loan for part of the project while the Oregon Economic and Community Development Department will be loaning up to 40 percent
"When construction is completed, there will be a direct loan from Banner Bank and a direct loan from OECDD," Kincaid said.
"What's nice about this is it is coming in as an existing business, as opposed to a startup," Kincaid said. "You have less risk with an existing business than you do with a startup business. You have some history and background to look at."
Cutters Edge manufactures three gasoline-powered saws with different types of blades, including one used by firemen and police to cut through steel to extricate victims trapped in cars and trucks involved in motor vehicle accidents.
Other blades are designed to cut through wood, steel, reinforced concrete and other materials to extricate people from burning houses or commercial buildings. There's also a military version that Ruzich said "can cut through virtually anything," including armored vehicles, bullet-proof glass, stainless steel and other materials to extricate victims.
"Members of the Secret Service guarding the presidential motorcade carry our saws in case there's an attack on the president and they have to rescue him from an armored limousine," Ruzich said.
In keeping with Ruzich's promise to hire local people to the extent possible to work in the construction and operation of the Cutters Edge plant, Phillips said Gyllenberg Construction of Baker City was hired as the general contractor.
The steel building being erected by Gyllenberg Construction was purchased from Behlen Mfg. in Baker City. Mike Karnowski, project superintendent for Gyllenberg, said local subcontractors were hired to install the plumbing, electrical and drywall and to do the painting.
Action Plumbing, which has offices in Baker City and La Grande, is the plumbing subcontractor; Valley Metal and Heating of Baker City is the heating and cooling subcontractor; and Tim Robertson Electric of Baker City subcontracted to do the electrical work, Karnowski said.
Ruzich said Baker Welding is also building the 30- to 40-foot-long steel tables for the assembly; and the company is buying desks and other office equipment for the plant from Ryder Bros. Stationery Store in Baker City.
Karnowski said he and six other construction workers - mostly carpenters and laborers - employed by Gyllenberg stayed busy working on the Cutters Edge project since August of 2007.
In addition to serving as the general contractor over the entire project, Karnowski said he supervised the Gyllenberg crew that did everything from pouring the concrete footings and floor to erecting the metal building and framing the interior wood walls.
This week, the Gyllenberg crew was busy installing insulation in the exterior walls and putting up the exterior siding, Karnowski said.
"The metal structure and interior wood framing is all done," Karnowski said. "We are at the point right now, we are putting the skin on the outside of the building."
On Tuesday, Karnowski said he was working with a short crew composed of Ty Findley, Mark Sexton and Ron Forester, who were busy installing the metal siding on the south side of the building.
"We did the north side in half a day, but the south side is taking longer because of all the doors and windows," Karnowski said, adding that the south side houses a two-story office portion of the building.
At its highest point at the peak of the roof, Karnowski said the building is about 36 feet tall to accommodate tall garage-style doors high enough to allow semi-trucks to be pulled inside to be unloaded during the cold, snowy winters.
As part of the building's energy efficient design, Karnowski said skylights with translucent panels will be installed in the high part of the roof.
"The skylights should provide enough sunlight that they won't even need to turn on the lights over the main floor on sunny days," Karnowski said.
"This building has the most insulation we can put in the walls," Karnowski said, adding that the insulation factor is R-N in the walls and R-20 in the roof.
The windows are energy efficient double-pane windows with vinyl frames manufactured by Jeld-Wen, Karnowski said.
"Oregon code has the highest UV values in the nation, so you can't buy windows in Boise and install them in here. You have to buy windows made specifically to comply with the Oregon code," Karnowski said.
"These steel buildings are surprisingly easy to heat and keep warm. Two space heaters will heat the production floor," said Karnowski, who came to Baker from Nevada in 1991 to work on construction of the Oregon Trail Interpretive Center and other projects, and has been working for Gyllenberg Construction for 16 years now.
He said the Cutters Edge building, like most metal buildings, is designed to be erected in a specific order, with the siding on the exterior walls installed first and the overhanging metal roof installed last, which is necessary to form a weather-tight seal that keeps the rain and snow out.
Karnowski said he's hoping to get the building completely enclosed before the snow falls.
"I love these metal buildings. They go together great, they are easy to build, and they are virtually fireproof," Karnowski said. "A hundred years from now this building will still be here, and it will be just as structurally sound as it is today."
He said the exterior siding and roof will be done by the end of November so Cutters Edge can begin moving manufacturing and office equipment from the Julian plant into the Baker City plant while construction crews put the finishing touches on the outside of the building and complete asphalt paving of the parking lot and driveways during the first two weeks of December.
Phillips said Cutters Edge is ideally suited to Baker City, in terms of its size and small staff requirements, its strength as an established business with established global markets, and its commitment to hiring and buying local to the extent possible.
To lure Cutters Edge to Baker City, the Oregon Economic and Community Development Department and the Baker County and Baker City economic development team competed with towns in many other states, including Arizona, Idaho, Montana, Nevada and Oklahoma.
Incentives provided to Cutters Edge included a 10-year business development tax exemption under the former Oregon Investment Advantage program, which is available to businesses locating in towns (including Baker City) in economically distressed areas with a population of 10,000 or less; a property tax deduction amounting to roughly $3,000 a year for three years through the Enterprise Zone program on the building construction cost; a one-time payment of $18,500 from the state's Strategic Reserve Fund to help pay land acquisition costs; and $43,000 in two separate awards - one for job creation and one for equipment and relocation costs - from the Regional Rural Investment Fund Baker-Morrow Regional Partnership.
Phillips said some of the economic development funding is subject to the company fulfilling its pledge to create a certain number of family wage jobs.
If the company fails to bring the agreed upon number of jobs, or if the jobs pay less than the amount specified as the region's family wage average, then some of the funds awarded would have to be repaid, Phillips said.
"Any time we can attract companies that bring family wage jobs to Baker County, that's a good thing," said Phillips, who is one of four management level employees with Cutters Edge who will be running the Baker City plant.
In addition to Ruzich and Phillips, Cutters Edge general manager Dean Morris, and office manager Sue Barnes are moving up from Southern California to work at the plant in Baker City.
Ruzich said he already purchased a house on five acres in the Baker City area and Morris bought five acres where he plans to build a house.
In addition to the top management team, Ruzich said two or three other key employees are expected to move to Baker City to work at the plant. Other than that, the rest of the staff will be hired locally.