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Local manufacturers excited, but foresee hiring challenges as Tesla announces HQ move to Austin

Manufacturing is already a booming industry in Austin with a high demand of workers. Tesla's headquarters moving to the Texas capital could be a double-edged sword.

AUSTIN, Texas — With Tesla moving headquarters to Austin, the Texas capital is making a name on the national and international stage in the manufacturing industry.

"It's a super positive move, in my opinion, for kind of a long-term success of Austin and the economic environment," Andy Salo, CEO of East West Manufacturing, said.

Salo's company focuses on electronics. He jokes East West already does business "with some of the Elon Musk companies, I'll leave it at that." With Tesla headquarters moving to Austin, joining the already-in-progress Gigafactory, Salo and East West stand to benefit in the long run.

"I would say near-term, you know, we're going to be in a crunch just like we have been in the last few years, frankly. You know, there's already been a talent shortage," Salo said.

RELATED: Tesla moving headquarters to Austin, Elon Musk says

Salo competes with many other manufacturing companies for hiring workers, at least for some jobs. All manufacturers compete for some of those new hires.

"We've partnered with technical colleges, training programs and universities to attract students," Jeff Turk, CEO of Formaspace, said. "We've also partnered with teachers here locally who may not even know that manufacturing really exists in Austin or what that really means."

RELATED: Real estate expert says home prices near Tesla Gigafactory are already up 45% from last year

Formaspace builds custom office furniture on a pretty large scale: from science lab desks to office tables. Turk added that his company has had to ramp up different programs to attract more people. After 18 months of the pandemic, Formaspace is finally getting back to the staffing levels they were seeing before. However, the company has grown since then, so it's still behind on those staffing levels meeting the current need for workers.

"We do fight for the same workforce, and so we get that. Tesla or Tesla's recruiters call our people every single day," Turk said.

Turk and Salo agree, the pool of available workers will shrink even more rapidly with Tesla getting ever closer to finishing construction on the Gigafactory. With the headquarters moving to town, that will only prove to shrink the applicant pool more. However, they both hope it means more people will come to Austin for manufacturing work.

RELATED: Tech giants a continuing challenge for growth of affordable housing in Austin

"There is such a huge manufacturing ecosystem already here," Salo said. "That's the type of thing that makes it really appealing for those types of companies to want to move in a major way to Austin and the regional area."

"In the long run, it's a huge win," Turk said. "Announcements like Tesla, which I think is a global leading company that's leading technology and leading us maybe to a cleaner, more productive, maybe even safer society on the road is a huge win. In the short run, those are more people that are going to be competing to grab the same few houses that we have available, and the same little water supply, and the same roads that we tend to clog up twice a day and so on and so forth. So it does bring challenges."

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