The uncertainties around the future of the federal tax credit for wind energy claimed 407 jobs Tuesday at the Siemens wind turbine blade plant in Fort Madison.
“This is going to be a big blow to our economy,” said Fort Madison City Manager Byron Smith. “We have been real disappointed at the lack of action by Congress on the production tax credit.”
The layoffs will leave about 220 workers at the 600,000-square-foot Siemens plant, formerly the site of Fruehauf trucking manufacturing facilities that closed more than a decade ago. The plant was Fort Madison’s largest employer.
But it represents a reversal for Lee County, whose 8 percent unemployment rate is 2.7 percentage points above the state average. Fort Madison went through years of economic agony with the gradual closing of the Sheaffer Pen plant, which employed 1,000 at one time but closed in 2008.
“We’ve had some good news lately, especially the new fertilizer plant,” said Smith, referring to the announcement last week that Orascom of Egypt would build a new fertilizer plant and employ 165 workers in Lee County.
Fort Madison took the heaviest blow in Siemens’ layoffs of 615 workers, which included cuts at facilities in Hutchinson, Kan., and Orlando, Fla.
Siemens said in a statement that “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 news caught the attention of President Barack Obama’s campaign, which reminded voters of his support of the tax credit, as well as opposition by his opponent, Mitt Romney.
“Today’s announcement is another reminder of the clear choice we face in this election,” Obama’s Iowa director, Brad Anderson, said in a statement. “In particular, it illustrates the importance of extending the wind production tax credit, which is vital to supporting thousands of wind energy jobs here in Iowa.”
U.S. Sen. Chuck Grassley, R-Ia., said that the tax credit renewal is part of a package of so-called extenders, also including the $1-per-gallon tax credit for biodiesel, that are to be taken up by Congress after the November election.
“Unfortunately, it won’t come fast enough to prevent layoffs,” he said.
Wind energy interests warned earlier this year that if the 2.2 cents-per-kilowatt-hour production tax credit is not renewed before its Dec. 31 expiration, jobs would be lost.
“We said this would happen, and there likely will be more layoffs if the production tax credit isn’t renewed,” said Harold Prior, president of the Iowa Wind Energy Association.
Siemens said the plant supported an additional 350 jobs of suppliers. Obama visited the plant in April 2010 and praised the “unbelievably impressive technologies” at the facility.
The layoffs will be the second round in Iowa’s wind energy industry this year. Clipper Windpower in Cedar Rapids reduced its 300-employee workforce by 76 beginning Aug. 27.
The American Wind Energy Association has said that at midyear, about 6,000 Iowans worked at wind plants in Fort Madison, West Branch, Cedar Rapids and Newton.
Siemens was the major supplier of blades for MidAmerican Energy’s 1,000-megawatt expansion of its wind capacity in Iowa in the past two years. The Des Moines-based utility said it expects to complete the project by year’s end.
In 2008, Siemens supplied 76 blades for MidAmerican’s Adair wind project in Iowa. In late 2010, Siemens received its largest wind order ever for 258 wind turbines for MidAmerican’s 593.4-megawatt Iowa wind-expansion projects in Adams, Adair, Calhoun, Cass, Marshall and Pocahontas counties.
This year, Siemens provided the turbines for 176 wind turbines built at three sites in Iowa.
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