Kansas has set its sights on creating 10,000 green jobs, many of them from manufacturing and assembling the parts for wind energy turbines.
The state’s big bet on wind power has attracted a few hundred jobs so far. But even that success shows the huge challenge Kansas faces.
To turn a few hundred jobs into thousands, Kansas has to win big manufacturing projects and attract the companies that supply them, too. And that means beating out China and other foreign competitors who rule those markets.
“We need to temper our expectations on wind energy,” said David Swenson, an Iowa State University economist known for deflating the ethanol industry’s job claims. Now, he says, the same “environment of hype” is developing around wind power.
Kansas’ biggest successes so far – and the reasons to be cautious – can be found in Hutchinson.
Over the last couple of decades, the town lost thousands of jobs and was disappointed in its efforts to lure new companies. But that luck changed in 2009 when Siemens Energy announced it would build a plant in Hutchinson.
The news of the assembly plant’s coming electrified residents, including William Long. He has a clothing store there and has been worried about the town’s future.
“This is a real shot in the arm,” he said.
The plant already has 130 employees and, when operating at full speed by 2012, is expected to have 400 workers.
The Siemens plant assembles parts that go into the nacelle of a wind turbine, which includes the generator, gearboxes, drive train and electronic controls. The RV-size nacelles each weigh 92 tons and measure 12 feet wide and 38 feet long.
When the Siemens plant opened in December, Sam Brownback, then the governor-elect, said: “I look forward to all the ways my home state of Kansas will take the lead on increasing national access to wind energy as we continue to grow the Kansas economy and create jobs.”
The plant was a big victory for a strategy pushed by Brownback’s predecessor, Gov. Mark Parkinson, that realized early on that manufacturing was the only place to find many green jobs.
Wind farms themselves, which now dot the state, don’t provide that much work.
In one study, the National Renewable Energy Laboratory in Golden, Colo., figured that building a utility-scale wind farm with dozens of turbines created just 67 construction jobs. And the operation and maintenance of the wind farm would take only about a half-dozen people.
But the wind turbine manufacturers and their supply chain for such a wind farm would contribute more than 300 jobs, the energy lab estimated. And a well-located plant would have a good prospect of supplying more wind farms as they were built.
Kansas’ place in the center of the country’s prime wind energy territory was one of the reasons Siemens picked Hutchinson. The move quickly paid off when an Iowa utility recently placed a big order for 258 nacelles.
But Hutchinson’s hopes – and the state’s – also ride on drawing the companies that will supply the Siemens plant and others like it in the state.
If that happens, how many jobs could be created?
Wichita State University’s Center for Economic Development and Business Research says plant jobs like the one in Hutchinson will create at least twice as many additional jobs, from suppliers and others who benefit from the extra money rippling through the state’s economy.
By that math, the Hutchinson plant at full capacity with 400 employees would create an additional 800 jobs.
Kansas also has persuaded a few other manufacturers to announce plans to open plants elsewhere in the state. Add those projects to the Hutchinson plant and the estimate grows to a total of 1,200 direct jobs and an additional 2,400 jobs from suppliers and others.
Not bad – but not huge in a state with a civilian labor force of 1.5 million and 102,600 unemployed job seekers at last count.
And it’s not clear that even that number of jobs will emerge, especially in the supply chain for the main plants.
Draka, a Dutch cable supplier, is opening a plant in Hutchinson that will employ up to 20 people. But so far it is the only one to be announced, although the town hopes others will follow.
“We’re still waiting for it to happen, but in a year or two if it doesn’t, there will be disappointment,” said Tom Arnhold, a Hutchinson lawyer.
Siemens isn’t giving specifics on the origin of the parts being assembled at its Hutchinson plant.
But it wouldn’t be unusual if the plant ended up assembling expensive parts made overseas. That’s what a lot of U.S. wind energy plants do.
The clout of China and other lower-cost manufacturing countries in the wind market showed up in an analysis by the Investigative Reporting Workshop at American University. That group found that more than 80 percent of $1 billion in federal stimulus grants for wind projects went to foreign countries. One of the projects, a $1.5 billion wind farm in Texas, expected to collect $450 million in stimulus money – but use wind turbines made in China.
Sen. Charles Schumer, a New York Democrat, and other federal officials were furious.
“Very few jobs here, lots of jobs in China,” Schumer said. “That is not what I intended or any other legislator who voted for the stimulus intended.”
Another disappointment has been the pay for many of the wind industry jobs that do stay in the United States.
Wages around $16 an hour were expected by some when the Siemens plant opened in Hutchinson. But that was averaging the plant’s $11- to $20-an-hour wages, and Siemens won’t say how many of the jobs pay the $11 starting wage.
That wage would give a family of five an income at the federal poverty level, sparking comment on the Hutchinson News newspaper’s website.
One commenter said Siemens was taking advantage of a state that is “land of the ones willing to work for low pay.” That view was countered by another who wrote that any job was better than nothing, and “people are smart to take what they can get.”
Emil Ramirez, with the United Steelworkers Union, said he believed Kansas had a future in wind energy, including taking advantage of facilities abandoned by airplane manufacturers. But he was taken aback at the starting wage at the Siemens plant, which his union is not seeking to organize.
A glimpse of what’s ahead for Kansas might be found in Iowa, which has been more aggressive than Kansas in building wind farms and attracting the manufacturing, including a wind turbine factory.
Some of the manufacturers have offered wages as low as $9 an hour, and employment levels have at times been volatile. A blade manufacturer in Newton, Iowa, laid off hundreds of employees last year because of poor sales before eventually hiring most of them back by the end of the year.
About five years into recruiting wind energy manufacturers, Iowa can point to about 1,600 people employed by them in a state of 1.6 million employed.
“Don’t be changing your college curriculums to prepare for it,” said Swenson, the Iowa State economist.
And there’s some advice from Howard, S.D. In the 1990s it started developing wind energy and became a national model for how to use clean energy to help revive a small town. But it hasn’t been easy, and there have been setbacks.
Many of Howard’s jobs were provided by a blade manufacturer, but last year that company left. Now the town’s industrial park employs 42 people instead of 133. Town officials are talking to other wind energy companies, hoping they’ll move in.
“One of the realities is to always be paying attention,” said Kathy Callies, vice president of the Rural Learning Center in Howard.