The Siemens Gamesa plants in Hutchinson and Iowa will be shutting down this summer and laying off most employees as the company awaits new wind turbine orders, officials announced on Friday.
The blade manufacturing plant in Fort Madison, Iowa, will close first, in June, followed by the Hutchinson nacelle manufacturing plant in July.
The company called the closures a “hibernation,” indicating it would be temporary. But a spokesman said it was unclear how long the plants would be closed, depending on market conditions.
“Employees at both facilities – 171 in Fort Madison and 92 in Hutchinson – will be released from employment during the hibernation,” the release stated. “All affected employees will be provided with a comprehensive separation package, which includes severance pay, benefits continuation, career counseling, resume preparation, and job placement assistance.”
Plant numbers had, at both locations, already been down following workforce reductions announced in February.
“The hibernation of our manufacturing and assembly facilities is an unfortunate but necessary measure to address the current challenges in the U.S. onshore wind market,” Shannon Sturgil, CEO of Onshore North America, stated in the release.
“We continue to pursue new orders and remain fully committed to finding a path in support of our Fort Madison and Hutchinson manufacturing facilities,” she stated.
Lingering issues cited
The company blamed an inability to take orders during a patent challenge last year, which it eventually won, followed by a slowdown in wind farm development pending the passage of anticipated federal climate legislation.
“Based on the current load, they will finish the blades in Iowa before they finish the nacelles in Hutchinson,” Andrew Luther, Siemens Gamesa Communications Manager of North America Corporate Affairs, said in explaining the staggered shutdowns.
“We don’t have exact dates” when each plant will close, he said. “There is always wiggle room around when production finishes.”
“A very small core team” will remain at each facility to maintain the buildings and prepare to ramp them back up “once we hit a point to start a ramp-up process,” Luther said.
No projections on reopening
Officials had no projections on when the plants might reopen, but Luther said that is the intent.
“Siemens Gamesa continues to pursue new orders and monitor the market situation,” he said. “Obviously, climate legislation is still undergoing negotiations in Congress. All that can affect when the hibernation ends. We will continue to pursue orders, and we’ll continue to monitor the market, but we don’t have a predicted date. It depends on a lot of factors out of our control.”
On Feb. 10, the corporation, which is headquartered in Spain, announced it was laying off 37% of its employees in Hutchinson, going from 186 to 117. It also cut 121 jobs in Iowa at that time.
It was unclear if additional cuts subsequently were made or if the difference between employment levels then and the layoffs announced Friday is how many will remain on the payroll.
The company at that time cited the same causes.
Siemens AG opened the plant in Hutchinson in 2010. At its height, it employed 365 people.
Hutchinson Chamber responds
“Our thoughts are with the employees and families impacted by this sudden downturn in the wind energy industry,” said Hutchinson/Reno County Chamber of Commerce President Debra Teufel.
“We want to work together with our members to surround these families and individuals with resources that help them find employment here in Reno County,” she said.
“Siemens Gamesa Renewable Energy is an important employer and significant contributor to our local economy. The Chamber’s number one goal is to be a resource for individuals and businesses and to connect them with resources that grow the local economy,” she stated.
Teufel said she’s already contacted Kansas Works and the Hutchinson Community College “to coordinate efforts with a rapid response for a career resource fair at HCC very soon.”
“We have the best workforce team at HCC, and we have companies already eager to hire individuals with skills in manufacturing, engineering and support services,” she said. “We will work with local media partners to make information available on specific resources and dates as they become available.”
The Siemens employees will be receiving information on how to register in the KansasWorks system, but she encouraged employers who wish to post information for available jobs to go to GreaterHutch.com or to call the Hutch Chamber at 620-662-3391.
Siemens Gamesa in the news
Last month, Siemens Gamesa reported a $329 million second-quarter operating loss, and Chief Executive Jochen Eickholt, in a call with analysts, said there were “a number of underestimated complexities” delaying the launch of the company’s new 5X onshore wind turbine.
Meanwhile, Siemens Energy, which has a 67% stake in the company, announced Wednesday it was considering buying all the shares it does not own in an attempt to gain full control of Siemens Gamesa.
If it does, the intent is to “delist” the company from public trading.
The troubles at Siemens Gamesa have caused its share price to fall more than 50% over the past year.
Siemens Gamesa was created as a separately listed company five years ago, after the merger of Siemens’ wind business with Spain’s Gamesa.
Siemens Energy, which held a 59% stake in the new company after the deal, was then spun off of German-based Siemens AG in September 2020.
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