The executive director at Britain’s only UK facility for manufacturing onshore and offshore wind towers has called for talks with Scottish ministers as it emerged there are serious doubts about the South Korea-owned firm’s immediate future.
Yun-Cheol Kim spoke out after hearing calls for CS Wind UK to quit the factory in Scotland over its taxpayer-supported mothballed factory.
It came as a Scottish Government agency won a fight to block the removal of plant from the Machrihanish factory by CS Wind UK, which has received £3m in taxpayer-funded grants from the Scottish Government’s economic and community development agency Highlands and Islands Enterprise (HIE).
Court papers in relation to the action have revealed that despite indications to the contrary, CS Wind “has expressed doubts as to the sustainability of its operations” after announcing the redundancy of three-quarters of its workforce.
HIE fought CS Wind’s move to ensure that the plant – seen as a key part of the so-called green jobs revolution in Scotland – so it was capable of continuing to operate and to “protect its investment”.
Unions say the Campbeltown factory is effectively shut and fear they have decided to move on because the public subsidies have stopped.
Their concerns echo worries raised in Canada about the mothballing of a factory after the wind turbine manufacturer opened in Windsor in 2011 as part of a multi-million dollar deal with Ontario’s Feed-In Tariff program for renewable energy sources. CS Wind was expected to hire around 400 people when it first opened. As of 2015, it employed 482 people and as of last year, it there was no activity on site.
It started winding down production six years after promising jobs and economic investment with $10-million publicly funded incentives.
CS Wind used to have 134 staff at its Scottish base but workers say it has been overseen by just six people – as scores have lost their jobs, while the company recorded pre-tax profits of £7.1 million in 2018.
Elected representatives of the Kintyre area, including four councillors, the MP and the MSP have joined forces with Unite the Union at national and local level to issue an open letter to CS Wind urging them to seek orders for the plant or let others take over the facility in order to “secure local employment and a local place in the renewables industry”.
The letter stated: “We would urge you as a company to fulfil the promises you made to the workforce and the area when you took over the facility in 2016. If you do not intend to do so then we would ask you to vacate the facility rapidly and permanently to allow another manufacturer to take up the opportunities that exist.”
Mr Kim told the Herald from South Korea said that there needed to be further discussions before any decision was taken for CS Wind to move on and – despite indications to the contrary in court papers – it intended to remain.
“I understand the situation of the local workforce. So the local community may hope CS Wind vacates and some other manufacturer comes in.
“But CS Wind doesn’t have any intention to move out now. If the local community, government and Highlands and Islands Enterprise hopes that CS Wind moves out, we need to discuss all together.
“CS Wind hopes to keep business in Scotland, unfortunately we didn’t get the projects yet.
“CS Wind is working on getting projects actively. The periods of expected production for many of the projects are not now, but our sales department is communicating with potential customers continuously. “Many projects are not starting the bidding stage yet. Short-term operations, starting and stopping repeatedly is not good for the company or employee. So we are strongly looking for a long-term pipeline.
“If Scottish Government & HIE [find it] difficult to support CS Wind stronger and they hope that CS Wind moves out, I think that HIE may be able to ask us for it. We have to make a clear agreement to reach a final conclusion from my perspective.”
In December, the First Minister was urged to intervene amid concerns Scotland is missing out on a wind farm jobs boom, as CS Wind lost out on a key contract.
Charlie McDonald, Unite regional officer for CS Wind said of the latest situation: “Public money has gone to Korea.
“Basically CS Wind have shut up shop in Campbeltown and are still seeking orders but I believe they want to fabricate in Vietnam or China.
“They have a history of taking government subsidies then moving on. The workforce and community of Campbelltown deserve better.
“We believe it would be a scandalous that the hills, glens and valleys of the UK could be filled with towers from far and distant lands “This cannot be allowed to happen and the yard should be opened for business without delay.”
CS Wind were involved in the Beinn an Tuirc wind farm project on the Kintyre peninsula believed to consist of 18 turbines.
In November, ScottishPower Renewables, announced that it had begun work on the Amazon backed project which was to see 50MW of green energy, enough each year to power the equivalent of 46,000 homes.
ScottishPower had then stated the project would be powered by turbines supplied by Danish-owned Vestas, with the towers for the wind turbines being supplied by CS Wind.
Up to a hundred new jobs were expected to be created at the site over the lifetime of the project and it was announced CS Wind were on board.
Unite believe CS Wind lost the Beinn an Tuirc contract due to the uncertainty surrounding the factory. It was believed the contract would have provided the factory with a two months of work until other contracts could be secured.
The letter to CS Wind signed by Unite officials, Argyll and Bute MP Brendan O’Hara, Argyll and Bute MSP Michael Russell and four local councillors said: “We are concerned that since your announcement last year about reducing the work force and your subsequent actions in making redundant almost every employee you have not succeeded in securing a single new contract for your Scottish facility despite the fact that it is the only one in the country. Moreover, although you stated gaining new work as a key aim going forward we are informed by developers that you have not been willing even to bid for many contracts for which you would have been a suitable supplier.
“We are sure you are aware of the potential that exists for a company that is, as CS Wind has been as a result of the skills and effort of those who have worked there, efficient and productive. It is likely that demand for new on shore and off shore turbines will, given projections of applications for energy consent already submitted, due, scoped, being scoped or in preliminary talks, be for at least 1500 towers over the next period and possibly more. “We believe that your company would be strongly positioned to bid for a significant proportion of those units and we are also informed that developers would like to place contracts with you and support a Scottish renewables manufacturing industry.
“However, if you maintain your current stance and either refuse to bid or claim that you are unable to do so then developers will have to seek towers elsewhere, outside both Kintyre and Scotland. Meanwhile your company will continue to occupy a prime site in an unproductive way, preventing any other potential manufacturer from utilising the facility for which you have had substantial support from Scottish Government agencies and leaving a skilled workforce unemployed or forced to move from the area.
“However, if you maintain your current stance and either refuse to bid or claim that you are unable to do so then developers will have to seek towers elsewhere, outside both Kintyre and Scotland. Meanwhile your company will continue to occupy a prime site in an unproductive way, preventing any other potential manufacturer from utilising the facility for which you have had substantial support from Scottish Government agencies and leaving a skilled workforce unemployed or forced to move from the area.”
HIE which took action to block the removal of equipment, offloaded a 19% stake in Argyll-based firm Wind Towers (Scotland) that once owned the factory, to CS Wind which took over operations in April, 2016.
HIE and Scottish energy firm SSE, which sold its entire 81% stake in WTS said at the time that CS Wind planned to invest up to £14m in Scotland which would safeguard 130 skilled jobs and create up to 70 new jobs in rural Argyll.
HIE papers reveal that the taxpayer-funded agency gave CS Wind nearly £3m most of which was to create the UK’s first offshore wind tower factory.
The agency says conditions attached to the funding require the company to maintain business operations at the plant linked to the purposes for which the funding was awarded. That obligation period ran till March next year.
An interim interdict was granted to the HIE at the end of December blocking the removal of equipment and served by sheriffs’ officers.
Another interim interdict was agreed in early February by Court of Session judge Lord Ericht.
That stops CS Wind’s officers, employees and agents from removing plant or equipment from the factory out of the Highlands and Islands. It was amended to allow the company to deliver items manufactured to satisfy customer orders.
An appeal against the court action has now been rejected by the Court of Session.
A spokesman for Highlands and Islands Enterprise said: “We are still in regular contact with CS Wind over their plans for the site. They continue to inform us they are seeking to secure new contracts that will in return generate employment at the facility, although no new work has so far been secured.”
On 2018, HIE said a £2.8m extension and alteration of the factory leased to CS Wind “will increase the company’s competitiveness when bidding for offshore wind contracts”.
At a ceremony attended by CS Wind chairman Seong-Gon Kim in July, 2016 to mark the expansion plan and the announcement of a major Siemens contract, energy minister Paul Wheelhouse said: “It is a tremendous testament to the work of Highlands and Islands Enterprise and others that we have managed to achieve investment from CS Wind UK in this plant and hopefully it is a bright future for all that work here.”
The CS Wind development comes as concerns were raised that Scotland’s forecast of a jobs bonanza from the offshore wind farm revolution are “a pipe dream” as it emerged it has created just 6% of the 28,000 direct jobs predicted by this year.
The Scottish Government’s low carbon strategy published in 2010 which described the large scale development of offshore wind as representing the “biggest opportunity for sustainable economic growth in Scotland for a generation” with Scotland having an estimated 25% of Europe’s offshore wind potential It said there was a potential for the creation of 28,000 direct jobs and £7.1 billion investment by 2020.
It comes as concerns remain over Scotland losing out on multi-million pound contracts for Scotland’s wind farm revolution – after a ministerial summit convened to end the “scandal” of Scots green jobs going abroad promised action.