LM Wind Power scales down in N.D.A week after LM Wind Power announced it would cut more than 300 jobs at its manufacturing facility in Grand Forks, the company said it would create 300 jobs at a new factory in Brazil.
By: By Christopher Bjorke , Forum Communications, The Jamestown Sun
A week after LM Wind Power announced it would cut more than 300 jobs at its manufacturing facility in Grand Forks, the company said it would create 300 jobs at a new factory in Brazil.
The Danish company said there was no connection between the two events, but was instead a reaction to strong growth in wind power development in South America while the industry was losing momentum in the United States.
“The development of capacity in Brazil is about positioning the company for growth in a new and rapidly emerging market for wind energy,” wrote Christopher Springham, LM vice president for global communication, who reiterated the company’s justification of the Grand Forks layoffs, in an email to the Herald.
“Our reductions are a necessary response to the uncertainty caused by federal government policy and specifically the urgent need to renew the PTC,” he wrote.
The federal Production Tax Credit, or PTC, provides energy producers a 2.2-cent credit per kilowatt-hour of wind energy generated and is a major industry subsidy. It is scheduled to expire Dec. 31 unless it is renewed by Congress.
LM said it is reacting to the expected drop in wind power investment with layoffs in Grand Forks, where it produces blades, and at its facility in Arkansas.
The Otter Tail Corp. is selling its wind tower manufacturing company, DMI Industries, including its West Fargo factory, also in the wake of the possible PTC expiration.
Growth goes south
While the U.S. wind industry is bracing for a downturn, the industry in Brazil looks much more attractive.
The country’s wind power capacity has had rapid growth the past few years, according to the Global Wind Energy Council’s 2011 global report.
The wind industry there increased its capacity by 63 percent in 2011, according to the report, and it has plans to install 7,000 megawatts, seven times its total capacity in mid-2011.
“Brazil is one of the most promising onshore markets for wind energy, for at least the next five years,” the report said.
LM’s Brazil factory will make blades, and it is scheduled to start production in September 2013, according to a company announcement Tuesday.
Klaus Thiessen, president of the Grand Forks Region Economic Development Corp., said his organization was aware of LM’s plans for the Brazil factory as it prepared to cut staff in Grand Forks, he said.
Thiessen said the timing of the expansion and the layoffs was the result of changes in both markets and not related.
“This is a response to the emerging market in South America,” he said. “They had to get out there and get in the lead.”
The laid-off employees in Grand Forks will work through Nov. 30, the company said last week.
Keith Reitmeier of Job Service North Dakota in Grand Forks said his office has been working with LM to help laid-off workers find new jobs. They are planning a reverse job fair Nov. 20, when employers will be able to meet with workers at the LM plant and present other job opportunities.
“LM has been very accommodating working with them,” Reitmeier said.
North Dakota Democratic U.S. Senate candidate Heidi Heitkamp, along with Sen. Chris Coons, D-Del., plan to tour LM today and speak in favor of the tax credit extension.