California high-tech hub Grass Valley pinched by recession

For the past 50 years, this scenic slice of the Sierra foothills has been an unlikely high-tech heaven.

A cluster of companies is responsible for some of the most sophisticated television broadcasting equipment found anywhere. TV executives from Europe to Asia recognize the name "Grass Valley" and spend millions on routers, switchers and other components manufactured and engineered here. Other tech companies have sprung up in the region, making everything from medical devices to circuit boards.

But the recession has brought layoffs, cutbacks and ripples of anxiety to the technology companies of Grass Valley and neighboring Nevada City. Some firms are expanding, but what's happening overall is a small-scale version of the slump in Silicon Valley.

Len Dole, president of a video-tech company called ISIS Group, took a phone order the other day from a Bay Area production firm. It was a tiny order – for an audio converter box priced at $600 – but five minutes later the purchase was vetoed by the company's boss.

"This is the worst I've ever seen it," said Dole, a 45-year industry veteran.

ISIS has laid off six of its 20 employees and put its factory on a four-day workweek.

Technology is as much a part of the scene here as the artsy tourist trade. More than 80 tech companies employ a combined 2,000 or so workers, according to the Nevada County Economic Resource Council. That's about 7 percent of the county's work force.

While layoffs in construction have been far more severe, the tech sector's problems have contributed to the downturn in the county's economy. Unemployment hit 8.4 percent in December, up from 5.5 percent a year earlier.

Perhaps most troubling is the fate of the company once known as Grass Valley Group, the business that ignited the region's tech revolution in 1959. Now called Thomson Grass Valley, it just laid off 7 percent of its work force and was put up for sale in January by its owner, French electronics conglomerate Thomson.

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