Wind turbine and blade makers grow Corn Belt jobs
The product: Molds holding half-sections of composite turbine blades fill the floor of TPI Composites’ plant in Newton, Iowa. It makes blades exclusively for General Electric wind turbines. Photo by Daniel Cusick.
WEST BRANCH, Iowa — Were it not for the National Park Service’s requisite brown sign directing highway travelers to the nearby Herbert Hoover National Historic Site, there would be nothing outwardly remarkable about this gas-and-go exit along Interstate 80 in the heart of Iowa flyover country.
Iowa City, the humming university town 8 miles up the road, offers far more to the discerning tourist. And just beyond is the commercial center of Coralville, where it’s easier to book a hotel room or find a restaurant serving Iowa’s signature food, pork tenderloin.
Looks deceive. As home to wind turbine manufacturer Acciona Windpower NA, West Branch has emerged as one of a handful of Midwestern communities on the vanguard of the U.S. clean energy economy. The small city of 2,300 has found an economic niche that’s the envy of thousands of other small towns across the natio
Herbert Hoover, the former Commerce secretary who later became the 31st president, might swoon at the economic pluck of his boyhood home, where the Spanish energy giant Acciona Energia invested $23 million in April 2007 to build its first North American manufacturing facility.
The decision by Pamplona-based Acciona to anchor its U.S. manufacturing operations at West Branch was made after an extensive review of potential sites, ultimately narrowed to a few locations in the Midwest. “It was the geographic center of the wind industry,” said Joe Baker, Acciona Windpower NA’s CEO, who joined the company in 2010. “We’re here because this is where the wind blows.”
Iowa is also where major railroads running east and west meet major rivers running north and south, giving the state a logistical edge for the shipping of very large pieces of equipment that make up the core components of a wind farm — the turbines, blades and towers. Its primary interstate highways, I-80 and I-35, are also less congested than those of its eastern neighbor Illinois, aiding in the transport of turbine blades that require special trailers to accommodate their 165-foot-long spans.
Convenient to transportation
Indeed, several experts noted that Iowa — and particularly the I-80 corridor in eastern Iowa — has emerged as the backbone of the U.S. commercial wind power sector, much the way that New York dominates the U.S. financial sector and the Gulf Coast anchors the oil and gas industry. Since 2005, the state has enticed four global wind energy firms to establish core manufacturing facilities here, while dozens of secondary supply chain firms have followed the leaders into the cornfields.
Within an hour’s drive of West Branch, Acciona’s rival, Clipper Windpower of Carpinteria, Calif., occupies a 330,000-square-foot plant at Cedar Rapids where it builds its 2.5-megawatt Liberty wind turbine. Meanwhile, two blade manufacturers — Siemens Wind Power at Fort Madison and TPI Composites of Newton — have become the largest employers in their communities, revitalizing local economies that were deflated by the retrenchment of Midwestern manufacturing in the 1980s and 1990s.
And more could be coming, as leading Chinese manufacturers like Goldwind seek to solidify their place in the U.S. wind energy supply chain.
“These plants are obviously attracted to the same geographic locations, and we’ve been able to sell them on the idea that Iowa is at the center of where this industry is now and where it’s going to be in the future,” said Harold Prior, executive director of the Iowa Wind Energy Association, whose 200-plus members are meeting in Des Moines this week.
While difficult to pinpoint, the wind supply chain may also be helping Iowa outpace its peer Midwest states in terms of economic growth. According to recent data from the Federal Reserve Bank of Chicago, Iowa outperformed Illinois, Michigan, Indiana and Wisconsin for personal income growth among nonfarm employment sectors in 2011. And it ranked second in the region behind Indiana for gross state product in 2010, with a 3.1 percent growth rate.
Experts attribute that growth at least in part to the emergence of the wind energy supply chain, which now employs an estimated 5,500 Iowans directly. Thousands more have benefited from wind energy land leases, which according to the state have generated roughly $14 million in additional revenue for farmers and landowners.
Five years after its opening, Acciona’s West Branch plant — which assembles the firm’s 1.5 MW turbines and will soon expand its line to assemble larger 3 MW units — is keeping pace to meet orders from wind farms in Iowa, the greater Midwest and points beyond. Last month, its factory floor was filled with dozens of hulking turbines bearing the logo of NaturEner USA, which selected Acciona as a partner on its 189 MW Rim Rock wind farm in northwest Montana.
A dozen of the plant’s 125 employees walked atop the turbines, roughly the size of Bayliner Cruisers, fine-tuning the hydraulic and electrical systems that will drive the wind turbines in western Montana’s harsh, unforgiving environment.
The work at plants like Acciona’s is more technical than assembly-line, and employees are paid accordingly. Average wages in plants like these, according to industry and government estimates, are between $50,000 and $75,000 a year, considerably higher than the average manufacturing wage in the Midwest.
Hard times not long ago
But the picture isn’t entirely rosy for Iowa, which has witnessed economic boom-and-bust cycles in manufacturing before, including layoffs at Acciona and Clipper as recently as 2009.
And while the state has been more insulated from the latest economic downturn due to a more stable farm economy driven by robust demand for corn-based ethanol, its interstate exits remain pocked with empty prefabricated metal buildings with “for lease” signs tacked to their windows.
Eighty miles up I-80 from West Branch, the vestiges of economic hard times are still evident in Newton, population 15,500, which built its reputation as the headquarters of Maytag Corp.
The Maytag appliance manufacturing plant at Newton, shuttered in 2006 when Maytag was acquired by Whirlpool Corp., sits as a hulking shell on the city’s northeastern flank, and its former 400,000-foot corporate campus remains in search of a new tenant. After Maytag’s departure, Newton became a poster city for economic hard times, drawing the attention of CBS News’ “60 Minutes” in 2010, which in turn caused a sprinkling of cash gifts on local residents and businesses from celebrity billionaire Donald Trump.
But there is optimism in Newton these days, created by the emergence of two significant players in the wind industry supply chain: TPI Composites, which builds composite turbine blades exclusively for General Electric Co., and Trinity Structural Towers, which occupies a wing of the old Maytag plant where it manufactures tubular sections used to construct wind turbine towers.
Neither firm has had an entirely smooth run in Newton, where labor tensions have affected both operations, including lawsuits brought by a small number of employees over wages, overtime pay and wrongful termination. TPI, which employs roughly 700 workers at Newton, is defending itself in federal court, while Trinity has settled one case and a second one remains in state court, according to a plaintiffs’ attorney involved in the cases.
On a recent Tuesday at 10 a.m., the parking lot at TPI’s quarter-mile-long blade manufacturing plant was filled to capacity, and on the work floor, employees were busy assembling the long, narrow composite blades used in GE’s 1.6 MW wind turbines, each one stretching half a football field, while in nearby offices, other employees were busily manning phones and laptops.
‘Scary’ to be in the midst of a policy debate
The plant’s general manager, Mark Parriott, an energetic executive who joined TPI after 26 years at Maytag, isn’t a standard-bearer for Newton’s hard times story. He’s busy trying to build a new manufacturing base in the community, one bound to the state’s commitment to wind power.
Walking the floor of the TPI plant, Parriott shows a reporter a white turbine blade bearing the signatures of several Republican presidential candidates — including GOP front-runner Mitt Romney — who at least tacitly expressed support for Iowa’s wind energy industry before the Iowa caucuses in 2011.
Parriott turns more steely when the topic of federal energy policy comes up, particularly the ongoing uncertainty over the federal production tax credit (PTC) for wind energy developers — the firms that write multimillion-dollar checks to firms like TPI to keep turbine blades coming off its factory floor.
He recoils at the term “subsidy” to refer to the PTC, arguing that tax breaks on the part of the federal government are in fact strategic investments in an industry that has proved it can create sizable amounts of clean energy as well as significant numbers of manufacturing jobs in the Midwest.
“It’s one of my great frustrations because I look at the PTC as something that shouldn’t be partisan,” he said, noting support for the PTC from Iowa’s politically divided Senate delegation, Republican Chuck Grassley and Democrat Tom Harkin.
“We know from experience that when these tax credits go away, there’s a dramatic drop in manufacturing. We’re just a bunch of regular working folks here. To be caught up in the middle of this policy debate, it’s scary for people.”