Failing wind market leads to job cuts at Vestas Pueblo factory

Source: By Mark Jaffe, The Denver Post • Posted: Tuesday, August 14, 2012

A Vestas employee walks past tower sections at the wind-turbine manufacturing plant south of Pueblo, where the company plans to eliminate 90 jobs. (Mike Sweeney, Pueblo Chieftain)

Vestas Wind Systems, the world’s largest wind- turbine maker, said Monday a weakening market is forcing it to cut about 20 percent of the 450 jobs at its tower factory in Pueblo.

The soft market is a result of Congress not renewing the federal wind-production tax credit, which is set to expire in December, Aarhus, Denmark-based Vestas said in a statement.

Vestas has four plants in Colorado employing 1,700 people.

The company’s statement on the Pueblo job cuts made no mention of the three plants in Windsor and Brighton, which make blades and turbines.

In all, there are about 5,000 jobs in the wind-energy sector in Colorado, as companies such as Hexcel Corp. and Bach Composite have built factories to supply Vestas.

“In response to this market slowdown and in accordance with its business needs, Vestas Towers America in Pueblo, Colo., today adjusted its manufacturing workforce,” the company said.

Vestas said the cuts were equal to about 3 percent of the company’s total of 3,000 employees in the U.S. and Canada.

“It is disappointing,” said Jack Rink, president and chief executive of the Pueblo Economic Development Corp. “Vestas has been a good company and worked with the community. We’re heart-broken.”

The North American wind-turbine market has had a record year in 2012, but if the production-tax credit — equal to about $22 for every megawatt-hour of power a wind farm produces — expires, the market could plunge.

IHS Emerging Energy, a consulting group, forecast that without the production-tax credit, demand for wind turbines in 2013 would plummet 86 percent to 1.5 gigawatts from the record-setting 10.7 gigawatts of installations in 2012.

“Uncertainty over whether Congress will extend the Production Tax Credit is leading to a general market slowdown for wind power manufacturers and developers throughout the U.S.,” Vestas said in its statement.

While North American sales have been strong, with Vestas completing 20 new wind-power installations by the end of 2012, the company has been struggling with losses globally.

In January, Vestas announced the firing of 2,335 workers, with the bulk of the job losses in Europe and China as part of company cost reductions and restructuring.

The U.S. wind-energy sector employs about 75,000 people, and the industry trade group, the American Wind Energy Association, forecasts that 37,000 jobs could be lost if the tax credit isn’t extended.

Democrats and Republicans in Colorado’s congressional delegation have called for renewal of the tax credit.

“This is an announcement I’ve dreaded,” said U.S. Sen. Mark Udall, D-Colo. “It shows the real- life consequences of not extending the production-tax credit.”

“The rest of the world is going to continue investing in their wind industries,” Udall said.