Citing ‘uncertain and changing market conditions’ – including doubts surrounding the extension of the wind energy production tax credit (PTC) – Siemens Energy said it is laying off 615 employees – more than 37% of its U.S. wind power workforce – across its manufacturing, projects and administrative-support functions.
The job cuts will be spread across the company's Hutchinson, Kan., nacelle assembly plant; its Fort Madison, Iowa, blade manufacturing facility; and its Orlando, Fla., Americas headquarters, which also serves as a base for about 200 field-based project support personnel, Siemens spokesperson Melanie Forbrick told NAW.
Just like many companies that have recently announced U.S. layoffs – including Vestas, Clipper Windpower, LM Windpower and DMI Industries – Siemens cited the looming expiration of the PTC as one of the reasons for the workforce reductions.
However, the company said other factors also contributed to the decision. For instance, the overall drop in wind turbine orders is also due to low natural-gas prices and a slow economic recovery.
"[T]he uncertainty surrounding the future of the production tax credit for new wind turbine installations, the current trend toward more natural-gas-based power generation due to record-low natural-gas prices and still lingering recession impacts on energy-demand growth are casting a shadow on the short-term future of the entire U.S. wind power industry," the company said in a statement released to its employees Tuesday morning.
"As a result, following the rapid ramp-up of the wind power industry over the past five years, the industry is facing a significant drop in new orders, and this has an unfortunate consequence on employment in this segment of the power industry," the statement read.
Siemens also noted that it had been working for 10 months to respond to the issues affecting its U.S. wind power business but, in the end, was unable to avoid making the layoffs due to market conditions beyond its control.
The company said it will continue to adjust its operations to reflect current and expected volume but stressed that it isn't giving up on the U.S. wind energy market.
"We remain committed to maintaining our U.S. factories and will continue to support the U.S. industry, as well as export wind turbine components to markets across the Americas," the company said.
Photo credit: Siemens Energy