FORT MADISON – Siemens Gamesa Renewable Energy announced Wednesday that about 32% of its workforce will be laid off permanently, effectively putting 121 workers in Fort Madison and 69 in Hutchinson, Kansas, out of a job.
With the layoffs, 254 employees of the wind turbine manufacturer remain at the Fort Madison plant and 117 remain at the Hutchinson facility.
Phone calls made throughout the day Thursday to people at the Fort Madison plant authorized to speak on the matter were met with a busy signal, and a message left for a company representative on another line had not been returned as of Thursday afternoon.
“A couple factors beyond local control factored into them having to lay off additional people,” said Dennis Fraise, CEO and senior economic developer of Lee County Economic Development Group, who has spoken with company officials about the layoffs.
According to a news release issued by Siemens, the layoffs were driven by an International Trade Commission ruling over trade secret theft and patent infringement claims between General Electric and Siemens, as well as a lag in the renewables market.
“Two primary factors contributed to this decision,” Shannon Sturgil, CEO of Siemens’ Onshore business in North America, said in the release. “While the final ruling of the ITC on the recent patent challenge case brought by a competitor was ultimately in our favor, we were temporarily prevented from pursuing new orders during the determination period.”
At issue during that period were two of GE’s voltage ride through patents. The ITC in January ruled in favor of limited infringement on GE’s claims regarding its low-voltage patent, which, according to Siemens, targets only full converter wind turbines running pre-2021 versions of software that Siemens no longer sells or imports.
Siemens Gamesa Turbines running later versions of the software were determined not to constitute an infringement.
Sturgil pointed to anticipation of U.S. climate legislation as the reason behind the slowing renewables market.
“This impacts our ability to rebound quickly to normal levels of production in those facilities,” Sturgil said. “These measures are designed to enable Siemens Gamesa to bridge the gap at its production facilities and prepare for when the market resumes its expected growth levels.”
The company saw wind installations peak in 2020 but anticipates a 3% year-on-year decrease in 2022, according to its Fiscal Year 2022 first quarter activity report.
Siemens is working to find opportunities for employees in other areas of the business where possible, and employees will be provided with a separation package, including severance pay, continuation of benefits, career counseling, resume preparation and job placement assistance.
Fraise said LCEDG is involved with Iowa Workforce Development’s rapid response team to help displaced workers find opportunities in Lee County, be it positions with other employers or opportunities for educational advancement that will assist them in attaining future employment.
“Our main focus is on helping those displaced workers,” Fraise said. “The economy is very solid right now, so there’s certainly a number of positions open throughout the region.”
Fraise is hopeful that Siemens will see a rebound allowing it to create more jobs in the future.
“Their business has been very cyclical, so there’s always that hope that there will be an opportunity in the future,” Fraise said. “There’s never a guarantee of that, of course, but based on past history, that’s kind of been the pattern.”
Siemens laid off about 200 Fort Madison employees in January 2018 due to a lull in business throughout Fiscal Year 2018. After that, about 330 employees remained at the facility. In September 2020, another round of layoffs prompted by a discontinuation in older turbine production resulted in a loss of 130 jobs.
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