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Fickle turbine winds  

Credit:  By DAVID SHAFFER, Star Tribune, www.startribune.com 28 December 2010 ~~

In the southwest Minnesota city of Pipestone, the last of 110 workers laid off from the Suzlon wind-turbine blade factory walk out the door this week, all but shuttering the plant.

Just 200 miles to the northwest, in Aberdeen, wind-turbine blade maker MFG South Dakota has a completely different problem: It needs up to 40 more workers and managers to boost its workforce to about 400.

And at the Siemens turbine-blade factory in Fort Madison, Iowa, employment has grown to 700, up by 100 workers since President Obama visited the plant in April to promote renewable energy.

The stark differences among the three Midwestern manufacturers show how business can blow hot and cold in what is still a young and growing wind-power industry.

“We are actually ramping up to production,” said Dave Giovannini, general manger of the MFG Aberdeen plant, which employs 361 workers and has been operating for three years. “We will be moving to a new blade version early next year, and we have our year pretty much booked at this point.”

MFG South Dakota, a unit of the privately held, Ohio-based Molded Fiber Glass Cos., builds blades for GE Energy’s 1.5- and 1.6-megawatt wind turbines, which this year outsold Suzlon models more than 2-to-1 in the United States, according to American Wind Energy Association data.

On Tuesday, Siemens announced its largest onshore wind-turbine order ever – for 248 2.3-megawatt units to be installed at three MidAmerican Energy Co. projects in Iowa. The blades – three per unit – will be manufactured at the Fort Madison plant in southeast Iowa, the company said in a statement.

Meanwhile, Suzlon Energy Ltd. isn’t profitable. Brad Wiggins, the India-based company’s regional manager in Minnesota, informed Pipestone city officials last month that the Suzlon Rotor Corp. plant would scale back to 33 workers because it had booked no orders for blades. Wiggins has declined to comment, but Pipestone officials say Suzlon is developing new blade technology and seeking orders.

No one’s moving – yet

One consequence of the layoff is that a Minnesota-funded assistance program has been placed in the unusual position of offering information to the 110 laid-off Suzlon employees about job opportunities in South Dakota. The two states have long competed to attract employers.

So far, none of the recently laid-off Suzlon workers has been hired by MFG South Dakota. The Aberdeen company, at its own expense, plans to hold a job fair in Pipestone early next year, hoping to attract experienced Suzlon workers.

Yet it may be hard to persuade former Suzlon workers to move from the Pipestone area because many own homes and have spouses with jobs.

“If you have one person working and one not working, they are not going to put all their eggs in one basket and leave to go to work up in Aberdeen,” said Linda McCorquodale, who works for a nonprofit organization that manages the Minnesota worker assistance program.

Giovannini, the manager of the MFG plant, said it has 25 to 30 production job openings and seven to 10 engineering and supervisory openings. The production worker pay scale is $12.50 to $22 an hour, he said. The company currently does not pay relocation costs for non-supervisory jobs, he added.

The unemployment rate in Aberdeen is 3.6 percent, far below the national rate of 9.8 percent and Minnesota’s rate of 7.1 percent.

“I wouldn’t describe it as a worker shortage, but we have created more jobs, and it does require us to do some recruitment,” said Julie Johnson, former South Dakota secretary of labor who now heads the Absolutely! Aberdeen economic development group.

GE’s successful turbine

One reason for the success of the Aberdeen plant is that it builds blades for GE’s most popular wind turbine.

“With more than 14,500 installed globally, GE’s 1.5-megawatt series wind turbines are the most widely deployed wind turbines in the world,” said company spokeswoman Milissa Rocker in an e-mail.

In Minnesota, for example, 147 GE 1.5-megawatt wind turbines were being installed this year, most of them at a large wind farm in Nobles County that owner Xcel Energy announced Tuesday is fully operational. By comparison, just 10 Suzlon turbines were installed this year.

Unlike Suzlon, which built its Pipestone blade factory in 2006, GE relies on outside firms to build its blades. Moulded Fiber Glass Cos. is a major supplier of fiberglass components. In 1953, the company built the original Corvette fiberglass bodies, and now has nine North American plants making composite products for a range of uses.

Earlier this year, GE and Suzlon reported major declines in their U.S. wind businesses, though GE said its was still profitable. Now, Rocker said, GE is “seeing new orders, due in large part to supportive policies and renewable energy goals,” including the one-year extension of a federal program that offers upfront cash grants in lieu of tax credits.

Siemens, based in Germany but with an expanding U.S. presence, said Tuesday that the outlook is positive. Siemens manufactures its own blades, using a patented, seamless technology with no glue joints that can become weak points, the company said.

Suzlon, whose sole business is wind power, reported a 2009 loss of $207 million and another $276 million in losses during the first three quarters of this year. During that period, Suzlon spent an estimated $100 million repairing blades under warranty after some of them developed cracks.

In the past three months, nine of 17 stock analysts that track Suzlon recommended that investors sell its stock, according to Bloomberg. Religare Institutional Research, based in Mumbai, India, said in a November report that the break-even point for Suzlon is “a distant dream.”

Source:  By DAVID SHAFFER, Star Tribune, www.startribune.com 28 December 2010

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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