Denmark-based Vestas Wind Systems (CO: VWS), the world’s largest wind turbine manufacturer is cutting 10% of its staff (2,335 jobs) and shutting down a factory to be able to
compete with Chinese competitors.
The situation is eerily similar to what solar manufacturers have been experiencing. Margins are sliced to the core in the face of fierce competition.
Vestas, which has made major investments in the US, says 1600 jobs there are at risk because the tax credit, widely viewed as essential to the industry’s growth – expires at the end of 2012.
"Today’s Vestas announcement shows the danger to U.S. manufacturing jobs if Congress waits any longer to extend the Production Tax Credit (PTC)," says the American Wind Energy Association (AWEA). "Manufacturers like Vestas have invested billions of dollars a year in the U.S. economy, and wind
energy has become one of the fastest-growing sources of new American manufacturing jobs.
Studies show that with stable tax policy the wind industry can grow to nearly 100,000 American jobs in the next four years and support 500,000 American jobs by 2030. But we have to
provide this industry with stable tax policy and a predictable business climate. A PTC extension needs to be first on the list of priorities to be included when Congress gets back to work again in a few weeks."
Vestas has cut its workforce three times in the past three years as it struggled with pricing pressures from Chinese competitors Sinovel Wind Group (SHA:601558) and Xinjiang Goldwind Science & Technology Co. (HKG:2208). Most of today’s announced job cuts will be in Europe.
Vestas has built four manufacturing plants in Colorado, costing over $1 billion. They employ 900 people – almost 700 have been hired in the U.S. and Canada just in the past eight months.
The US, one of Vestas’ largest markets, could be facing a tough 2013 if the tax credits aren’t renewed.
Read more about the Renewable Energy Tax Credits and contact your representative:
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