Main story: Silicon Valley company expands in MH at Alien Technology site
Golden State Assembly hopes to hire up to 600 by the end of the year
Published in the May 10 – 23, 2017 issue of Morgan Hill Life
By Marty Cheek
When Golden State Assembly needed a place to grow its operations, it first considered building a new facility in Modesto or Manteca. Executives at the Fremont-based component assembly company looked around the Bay Area and soon realized the former Alien Technology building in Morgan Hill made an excellent fit as a place to locate a new factory closer to their Silicon Valley customer base.
GSA President Cesar Madrueno and the company’s staff opened the doors Tuesday April 25 to welcome leaders of Morgan Hill’s city government and business community. The day marked the 10th year anniversary of the company’s founding, so the occasion was an extra special celebration in the company’s moving into the 82,000-square-foot building located in an industrial park on Butterfield Boulevard. Visitors toured through open space of future offices and saw workers putting wires into cable harnesses in spacious assembly rooms.
Madrueno explained how GSA has plans to expand its Morgan Hill Operations from 22 employees now working at the location to between 120 and 180 in three to four months. Based on how GSA’s customer market needs grow in 2017, the facility might have by the end of the year as many as 560 to 600 employees. The Japan-based microwave testing equipment manufacturer Anritsu Company, currently the city’s largest industrial employer, has about 440 employees at its Morgan Hill campus.
Last year, GSA made the decision to not only assemble but also build the components its customers need. The Morgan Hill facility perfectly suited GSA’s upgraded business model, said Matt Buscher, president and CEO of LaptopsAnytime. GSA assembles its automated checkout kiosks for people to rent laptop computers. Buscher worked with Edith Ramirez, the city’s economic development director, to get GSA through the hurdles of buying the empty Alien Technology building and turning it into an assembly and manufacturing center. The business climate and location in Morgan Hill was also a factor in setting up a factory in the city, he said.
“It’s a cross-commute for a lot of our employees so that’s a fantastic thing,” he said. “The real estate market in the Bay Area is just crazy. And on top of that, in my opinion, this is a blue-collar town. We’re businessmen at heart, but we come from a blue-collar background. You’ll see us on the floors.”
The company hopes to bring in workers from not only Morgan Hill but Gilroy, Hollister and Watsonville as well to its new site, he said. Most employees are coming from South San Jose.
The city of Morgan Hill’s staff made the process of getting into the building fairly smooth by cutting much of the red-tape other Bay Area cities often require companies to go through, he said. In a more bureaucratic permitting process, it would have taken an additional six months to move in.
“Morgan Hill (city staff) understands that their motive is to keep people working and prosper their city and they do everything they can legally,” he said. “If you need something done, they’re responsive and get it done. They’re a small enough group so they know someone who is in charge. In a bigger organization like San Jose, you often get sent somewhere else. In Morgan Hill, it’s not like that.”
The culture of Morgan Hill, compared to Fremont, has a small-town feel with plenty of excellent after-hours entertainment for GSA workers, he said.
“In the last 10 years, I’ve seen Morgan Hill grow. You’ve got the restaurants, you’ve got shopping,” he said. “I think that’s a key to having a good base so when we as CEOs bring in someone to work in an environment, we want that environment to be conducive. And we can use that as an inducement to get employees as well.”
With aspirations of being a businessman, Madrueno moved to the United States from Mexico when he was 19. After attending college he found a job with Santa Clara-based Agilent Technologies and worked there for many years, dreaming of building his own company one day. At his wife’s urging in 2007 he started GSA. He kept working the next five years at the grave-yard shift at Agilent to make sure money was available to grow his new enterprise. Assembling components for medical and solar companies, his company grew quickly. The Morgan Hill facility is GSA’s fourth site that it purchased. Tesla Motors is an important customer, making up about 22 percent of its base revenue. GSA makes customized cable harnesses for its electric cars. Representatives from the Fremont-based company recently took a tour of the new Morgan Hill site and were impressed, Madrueno said. The company hopes that if it wins a bid from Tesla for the new Model 3 car, it will be able to double its manpower needs at the Morgan Hill site. One incentive for Tesla is that Morgan Hill is near its factory, reducing any shipping issues for the components GSA builds.
GSA is a “big get” for Morgan Hill for a number of reasons, Ramirez said. The company will bring jobs to the community, one of the primary goals of the city’s economic development’s efforts. GSA purchasing the Alien building instead of leasing it sets deeper roots into the city and signifies a long commitment, sending a message to other Silicon Valley companies that Morgan Hill is a hot growth area for industry. The acquisition brought Morgan Hill’s industrial vacancy rate from 3 percent to 1 percent, telling developers that the 247 acres of industrial land is ripe for potential development. Developer Mwest is now looking to build on 40 acres of prime land set in the heart of the industrial park region north of town, Ramirez said.
“We are very excited about Golden State Assembly,” she said. “We hope this is going to be a long-term relationship with this company.”
The city council in April passed the Economic Blueprint, a long-view guide to working with the business community and residents to create more jobs in Morgan Hill. GSA represents the kind of company the blueprint encourages the city to focus on attracting in the next five to 10 years — small- to medium-sized companies that are seeking to expand.
“Hopefully, we can develop this as a trend. Our No. 1 focus is to attract jobs to our community and attract businesses to our community, and we’re hoping Golden State Assembly will open doors to us for other companies by exposing their suppliers or contract manufacturers to our community,” Ramirez said.
At the April 25 celebration at GSA, Mayor Steve Tate shared a few words of congratulations to the company’s staff in finding a home in Morgan Hill.
“My major message is welcome to Morgan Hill. I think you’ll find this community to be very welcoming and one where there are lots of things going on,” he said. “In a nutshell, we’re looking to produce many more jobs in Morgan Hill.”