By Mike Marut | May 16, 2023
Round Rock, Texas
Prototyping, electronics manufacturing, PCB assembly, and testing
East/West Manufacturing Enterprises works in the integrated circuit sector doing printed circuit board assembly, box builds, and other electromechanical assemblies for a variety of customers in an array of industries including aerospace, automotive, defense, industrial, and medical. Prior to the COVID-19 pandemic, Salo was forecasting growth trajectories that prompted him to seek a larger facility to purchase. Unable to find a suitable building for sale, he closed on vacant property in early 2020 -- deciding to build his own.
"The day we actually closed on that contract was the day that Tesla announced they were moving to Austin, back in July of 2020," Salo recounts. "That was crazy time, because then Tesla started sucking up all construction resources in a 150-mile radius of Central Texas, so you had to hurry up and build. So, we did, and we built the facility. It is a 43,000-square-foot facility. So, it's a little over five times the size of the space we were in. We completed that during 2021 and moved in the week before Thanksgiving."
The growth in physical footprint reflects the growth of East/West's workforce. When Salo bought the company in 2017, he had 16 employees. Now, in 2023, he has about 75.
The facility is state-of-the-art and chock full of innovation. "When you go out and you see the [surface mount technology] lines, everything's like super clean, because there's nothing overhead that's hanging down like you would typically see in other manufacturing facilities for power and so forth," Salo says. "All that we ran underneath. So, we ran about two-and-a-half miles of conduit underneath the foundation just to kind of be able to plug and play whatever we wanted to on the production floor."
Salo adds that he would consider his company a medium-sized business in the electromechanical sector but a small business in the grand scheme of manufacturing. Even with the ability to be nimble because of its size, Salo notes that the emergence of Tesla's headquarters in Austin and a $17-billion investment last year from Samsung in nearby Taylor has soaked up a lot of the available workforce.
"We've been able to grow somewhat organically from an employee base," Salo says. "I would say last year got particularly competitive and difficult to hire, probably early- to mid-2022. You had inflation going crazy, you had wages going crazy, and everybody was trying to hire, but [it] tapered off towards the end of 2022, thank goodness."
Salo attributes his company's continued growth to workplace culture and the changing image of manufacturing from smokestacks and grimy work conditions to clean, new facilities. This organic growth enables East/West Manufacturing Enterprises to be more selective with customers at a time when there are fewer integrated circuit manufacturers to meet the growing demand for electronic products.
"It's normally been fairly [straight forward] to grow," Salo adds. "You have to have the right culture internally, and then people will just want to work for you. Similar to new customers, most of our new employees are referrals from other employees -- their friends or former colleagues of other employees."
While Salo has enjoyed the growth of his company in both workforce and square footage, he adds that the current state of the economy could present challenges soon for manufacturers.
"I feel like right now this quarter that we're in is sort of like the first quarter of COVID," he continues. "And the reason I say that is because you just had the bank failures. You got one going on right now. It's PacWest. But you just had SVB, you had First Republic. The Fed supposedly may be done with hiking rates, and so I feel like we're in kind of peak disarray right now. Sort of like we were in peak disarray during the first quarter of COVID. So, I'm hoping this is the place where everybody just goes, 'Okay, maybe we should just get back to work and kind of proceed forth,' but we'll see. What happens this year? Nobody has a crystal ball, unfortunately."
Challenges: Salo says sourcing materials from other contract manufacturers has been a challenge since the pandemic.
Opportunities: "Where we see the biggest growth and are experiencing the biggest growth is in medial, aerospace, and defense," Salo says. "Because all those companies, they want it built here, right? They're not going to go overseas for those types of things."
Needs: Salo says East/West needs to continue building processes that are scalable. "So, if I'm going to build 100 of something, or 1000 of something, I need to do it in a way that lends itself to also building 10,000, or 50,000, or 100,000 of those things."