Weather Guard Lightning Tech

LM Wind Power Cuts 700 Jobs, Closes Blade Factory in Turkey

LM Wind Power announced the closure of their blade production factory in Turkey that employed 700 people. In Denmark, LM Wind Power appears to be cutting highly-qualified engineering and support staff. This news comes just days after their parent company, GE Vernova, became a stand-alone company.

Sign up now for Uptime Tech News, our weekly email update on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard’s StrikeTape Wind Turbine LPS retrofit. Follow the show on Facebook, YouTube, Twitter, Linkedin and visit Weather Guard on the web. And subscribe to Rosemary Barnes’ YouTube channel here. Have a question we can answer on the show? Email us!

Pardalote Consulting – https://www.pardaloteconsulting.com
Weather Guard Lightning Tech – www.weatherguardwind.com
Intelstor – https://www.intelstor.com

Allen Hall: I’m Allen Hall, president of Weather Guard Lightning Tech. And I’m here with the founder and CEO of IntelStor, Phil Totaro. And this is your News Flash. News Flash is brought to you by our friends at IntelStor. If you want intelligence that generates revenue, then book a demonstration of IntelStor at IntelStor. com.

A lot of news coming out of LM Wind Power. today. This is Friday, April 5th. All news reports indicate that the facility in Turkey is being closed and has been closed for a couple of days, evidently. And there is a massive shift happening, layoffs, at least 700 in Turkey. It sounds like up to a couple hundred, mostly focused in Denmark at the moment.

Phil, what is happening behind the scenes here?

Philip Totaro: There’s quite a bit. Obviously what G. E. Vernova has said publicly about this and LM for that matter, is that they want to focus on profitability. And simply put, they just didn’t seem to have enough order book to justify continuing the factory in Turkey.

Now we’ve talked before on the show about the fact that Turkey has one thing going for it as a market, which is not just the domestic demand that they’ve got which is reasonable, although not entirely robust but they have a favorable currency trade against the U. S. dollar, which means that if you’re using Turkey as an export market, it’s theoretically is a great place.

TPI’s there. There are a few other companies that have manufacturing facilities there. But the issue for LM is they weren’t for the blade lines that they have in Turkey. They weren’t getting enough orders for those blade lines that they have set up. And so I guess for them, it makes more sense to consolidate into their production facilities in Spain and Denmark.

As well as what they have currently in, in North America. And India and China for that matter.

Allen Hall: Several months ago, LM Wind Power was headed a direction of essentially separating Europe from the Americas, and running it as two separate businesses. And now this happens. Now there’s some significant layoffs happening in Denmark.

You still think they’re headed in that direction, trying to grab separate marketplaces and maybe react differently to those changing economics?

Philip Totaro: Yes, there, nothing seems to have changed based on, some of the internal memos and things like that, that have leaked out the where they suggested that they’re going to be doing this reorg.

But the reality is that again with the focus on profitability I believe that it makes sense for them to to do something that’s regionally segregated. Depending on how they want to proceed with the business moving forward, whether it’s divesting factories or acquiring factories, there, there’s any number of things they could do that is theoretically made easier by regionally grouping assets together.

Allen Hall: The people that are being laid off in Denmark, from what I can tell at the moment seem focused in engineering, maybe support engineering too, high level. paid long term employees that they’re are laying off. That’s not typical of a Danish company to do something like that. They must be doing some really major restructuring.

Philip Totaro: Yeah. We’ve seen people posting on different social media platforms about, the, they’ve been there for 15 years or 20, one guy was 26 years, I think. And the reality of that is that’s it comes back to profitability because people who have been there that long there, the pension cost for, that, that long lived at a company is going to be pretty high.

So it’s really unfortunate that this has had to happen to anybody. But it’s also, it, this take this in the context of recent comments made by the LM’s new CEO at the recent wind Europe event where he was talking about the fact that, China is presenting more competition and that comes in the form of Sonoma or CRRC which is Times New Materials which also has blade manufacturing, Dongfang’s got blade manufacturing.

There’s, still dozens and dozens of Chinese companies that are not only doing blades for the Chinese OEMs, but also some of the Western. And, it’s just hard to compete on price when you’ve got that level of competition. So this comes back to, the request that not only LM but a lot of European companies made saying, look, you’ve got to help us with.

Something that helps facilitate us covering these pension costs and helps improve the profitability of our businesses in Europe, if you expect us to be able to keep these jobs in Europe and the tax revenue from all these people in Europe, otherwise we’re going to have to look at lower cost tax revenue. jurisdictions to, India, China or even Brazil to go manufacture in.

Allen Hall: Does this drive a change in what’s happening within the EU politically? I haven’t seen anything this strong. Ørsted having a problem just recently, which sent shockwaves through the wind and energy community.

in Northern Europe, Scandinavia, right? And it had an effect in the United States and all over the place. This is likely to have a similar sort of effect. LM is obviously a major player in wind blades and has been there for a long time. Now there’s a bunch of free agents out there with a lot of technical knowledge.

You want to keep them engaged in Europe, you would think, otherwise they’re going to wind up in other places you may not want.

Philip Totaro: Yeah, and that, that’s actually the most important point of this is, you’ve got companies like Ares in Brazil who are looking at a global expansion that they’ve been very public about.

You’ve got. TPI that is also, out there as an opportunity for some of these people to land at, and you’ve got the Chinese keep in mind also, you’ve got companies like Adani group in India that have just announced this new, 5. meter rotor that they want to have, they’re planning on installing, something like 17 gigawatts of that in India alone.

With Adani’s, parent company support they’ve got projects in Sri Lanka and they’re also looking at, an international expansion. So the fact that there’s all these experienced LM people that are now available I wouldn’t be surprised to see them get snatched up. Whether, again, whether it’s any of the options in the menu I just listed above, it’s, it, it could be the, these folks are talented people from LM and they could end up landing anywhere.

Allen Hall: I do think there is more to come over the next couple of weeks. We’re just beginning to hear just the tip of the iceberg right now. So stay tuned to the Uptime Wind Energy podcast and to Newsflash here, and we’ll bring you the latest as we hear it.

LM Wind Power Cuts 700 Jobs, Closes Blade Factory in Turkey