June 5, 2021
Pennsylvania

Wind energy company closing Lehigh Valley manufacturing plant, shifting work to Mexico

By Jon Harris | The Morning Call | Jun 04, 2021 | www.mcall.com

A maker of components for wind turbine blades is closing its manufacturing plant in the Lehigh Valley and shifting the work to Mexico, putting 67 people out of work, according to a notice filed with the state, an internal memo and multiple sources familiar with the company’s thinking.

Windkits LLC is planning to stop manufacturing at its facility at 7346 Penn Drive in Upper Macungie Township on Aug. 13, according to a summary of the notice posted online Friday by the Pennsylvania Department of Labor & Industry.

While the notice does not provide a reason for the closure, the work done in the Lehigh Valley will be transferred to a plant the company opened two years ago in Matamoros, a city in northeastern Mexico near the U.S. border, sources and a company memo confirm.

“During the past year, we have experienced challenging market conditions as the near-term market in North America has been influenced by consolidation, leading to a reduction of the blade manufacturing footprint in North America as well as reduced production at the continuing locations,” read a May 25 memo to the company’s employees and vendors that was reviewed by The Morning Call.

“Furthermore, we see a market that demands a more comprehensive offering, from a different footprint, requiring a very close collaboration between kitting and materials. In combination with the current global market situation, we see a need to consolidate our footprint and have made the decision to relocate our core kit manufacturing in Allentown to Matamoros.”

A May 24 letter from CEO Brent Taylor to state and Upper Macungie officials – filed to comply with Worker Adjustment Retraining Notification Act – did not provide a reason for the decision. Taylor did not respond to requests seeking comment.

Windkits’ parent company, Denmark-based JSB Group, also did not respond to a request seeking comment. JSB, a provider of core kits to the wind industry, lists several production sites on its website that are “strategically at the center of several wind blade production clusters.” In addition to the Lehigh Valley and Mexico sites, that includes locations in China, India, Turkey, Denmark and Spain.

In 2018, JSB was set up as a business unit for kitting solutions within Gurit, a Swiss company with holdings in the development and manufacture of advanced composite materials, related technologies and select parts and components that acquired all shares in JSB.

For Windkits, which was first established in the United States as a joint venture between JSB and another company in 2008, the closure will end a roughly 10-year run in the Lehigh Valley.

Previously located in Bergen County, New Jersey, Windkits moved to the 72,000-square-foot site in Upper Macungie in 2011. The company had scoped out other locations in a 100-mile radius, including in New York and Connecticut, but found the Lehigh Valley had a solid offering of trained workers, access to distribution corridors, reasonable cost of living and lifestyle amenities.

In 2013, Windkits employed about 20 people in the Lehigh Valley, including automated-machine operators, band-saw operators, machine maintenance employees and production-line workers.

By late 2015, Windkits had grown to 50 local workers. The company makes what you find inside wind turbine blades. Inside what is otherwise a big hollow structure are layers of fiberglass cloth and lightweight stiffening materials such as balsa wood and foam.

The Windkits site in Upper Macungie is one of 29 manufacturing facilities in Pennsylvania that produce components for the wind industry, according to a report on the clean energy industry released last month by the state Department of Environmental Protection.

“The clean energy industry has been a growing source of jobs in Pennsylvania for several years prior, and the COVID-19 pandemic has created a backlog of clean energy projects, resulting in a need for more skilled workers to fulfill project demands,” the DEP wrote in a news release accompanying the report’s release May 12.

Demand for wind projects does indeed remain strong, according to a first-quarter report released last month by the American Clean Power Association. Specifically, the report notes, U.S. project developers installed almost 40% more wind power in the first three months of 2021 than in the first quarter of 2020.

The wind industry also has about 34,000 megawatts of total development activity in the pipeline, according to the report. Texas has the most land-based wind projects in the near-term development pipeline, at about 17% of the total, the report notes.

It’s unclear if the proximity to Texas played a role in Windkits’ work being shifted to Mexico, but multiple sources familiar with the company’s operations who requested anonymity pointed out that balsa wood – a major raw material for the company’s manufacturing operations – comes from Central and South America.

“The handwriting was on the wall when they opened the facility in Mexico in 2019,” one source told The Morning Call.

While Windkits’ impending exit from the area is unfortunate, local economic development officials believe displaced workers will find plenty of opportunity in a labor market where wages are rising to attract employees.

“I think folks working there will find comparable wages available and in demand in the Lehigh Valley right now,” said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp.

In addition, Windkits is leasing its building, which, at under 100,000 square feet, is in high demand.

“We’ll backfill that building in no time,” he said.

URL to article:  https://www.wind-watch.org/news/2021/06/05/wind-energy-company-closing-lehigh-valley-manufacturing-plant-shifting-work-to-mexico/