VLC cuts jobs in Bozeman: Gaming machine company moving manufacturing department to Nevada

Video Lottery Consultants in Bozeman is moving its manufacturing department, and
eliminating some of the more than 30 jobs attached to that operation, to Reno, Nev., company
officials confirmed Wednesday.

By KAYLEY MENDENHALL Chronicle Staff Writer

The move — the latest in a string of mergers, buy-outs and consolidations since the late 1980s —
will transfer the manufacturing operation to the headquarters of International Game
Technology, VLC’s parent company.

"The reason is, they do it much more efficiently than we do," said Mike Tessmer, managing
director of VLC. "Manufacturing is not what makes us successful here."

IGT builds 100,000 video-lottery and casino-style machines a year in Reno, whereas the
Bozeman manufacturing plant only produces from 1,000 to 4,000 a year, Tessmer said.

"There is a perception in the community that VLC is a manufacturing company," said Ed
Neuman, VLC’s director of human relations.

In reality, the company has in recent years focused more on game development and systems
management with an increased focus on game design as a long-term business, Tessmer said.

"I’m confident we’re stronger now than we’ve ever been," Tessmer said.

By moving the manufacturing portion of its operation to Reno, VLC will either eliminate or
reassign 32 of its 200 employees, Neuman said. VLC is, meanwhile, hiring engineers and
graphic designers for its game design business.

IGT merged with Anchor Gaming, VLC’s former parent company, a year ago and has since
absorbed Anchor entirely. VLC has remained a subsidiary, although through corporate
adjustments has emerged as the leader in state-run video-lottery markets, Tessmer said.

"VLC now oversees all video-lottery markets for VLC and IGT," he said. "(IGT) are the pros in
the casino markets."

Some of those workers, like Frank Dorothy, have offered to move to Reno and continue working
for the company. Dorothy has seven years seniority and said he and his wife were already
considering moving to a warmer climate as they ease into retirement. He’s hopeful about the
opportunity.

Others will be out of a job. But because the work is cyclical, layoffs are a fairly common
occurrence at the plant.

VLC contracts with several states to build and manage video lottery games. Tessmer pointed
out as those contracts are completed, the company lays off workers in the manufacturing
department and rehires when new contracts come along.

For example, a contract with the Oregon State Lottery to build 2,000 machines was completed
July 3, so the company needed fewer laborers.

On average, manufacturing jobs at VLC pay $8 to $12 an hour depending on the person’s
length of employment, Neuman said.

The engineering positions the company is currently recruiting for pay between $40,000 and
$60,000 a year, Tessmer said.

VLC gets some of its parts from local vendors including Revelation Engineering in Bozeman
and JE Soares in Belgrade. Neuman said the company has had conversations with both
dealers about the transfer of VLC’s manufacturing and the potential loss of revenue.

"We want to be fair with everyone affected so people can plan accordingly," Tessmer said. "We
want to sleep at night and that’s an easy way to do it."

Kayley Mendenhall is at [email protected]

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