PTC uncertainty drives Vestas to wind tower factory layoffs

Vestas is laying off about 90 people at its Colorado tower factory in response to ongoing uncertainty over the future of the primary US incentive for wind.

The Danish wind giant would not specify the exact number of layoffs at its state-of-the-art tower plant in Pueblo – an historic steel town bolstered by Vestas' arrival in 2009 – but a company statement says the reduction represents about 3% of its North American workforce of more than 3,000. The Pueblo factory had more than 450 employees.

"Uncertainty over whether Congress will extend the Production Tax Credit (PTC) is leading to a general market slowdown for wind power manufacturers and developers throughout the US," Vestas says in a statement.

"Vestas has noted that many wind power jobs are at risk if Congress does not extend the PTC — not only at Vestas, but also within the hundreds of domestic supply chain manufacturers that serve the wind industry in North America."

Indeed, the company warned in January, as it announced 2,335 layoffs globally, that 1,600 jobs could be lost at its US factories if the PTC is not extended.

The PTC is available for projects that begin operation by 31 December, driving what looks like a record 2012 for US wind installations. Vestas factories have been humming to build components for some 2GW of new projects expected by the end of this year.

But without the PTC, installations in 2013 are expected to plummet. Factory orders are already drying up. The American Wind Energy Association – which has yet to offer a 2013 market forecast due to the PTC uncertainty – says some 37,000 jobs could be lost in absence of the incentive.

Vestas says it "remains committed to manufacturing wind turbine components in its Colorado factories to meet the needs of its US customers, and Vestas will continue to export turbine components from its US factories to its customers in Canada, Mexico, and Central and South America".

This suggests it is not exiting the tower manufacturing business in North America, as it did in Denmark with a sale in June to China's Titan Wind Energy.

Vestas made no comment on the fate of workers at its three other North American factories – two for blades and one for nacelles, all in Colorado.

The company reports detailed second-quarter earnings on 22 August after releasing a preliminary snapshot to investors on 31 July.