Vestas cuts jobs as wind industry faces tax credit expiration
Denmark’s Vestas Wind Systems has said it will lay off 1,400 workers in addition to the 2,300 job cuts it announced at the beginning of the year.
The cuts will save the company $124.7 million, Vestas said, and will help create profitability in 2013 when the sector is expected to experience a downturn with the expiration of U.S. wind power production tax credits.
The move points to the struggle that renewable energy companies are facing given the slower global economy and tightening public purse.
Vestas has downgraded its targets for full-year turbine shipping orders to 6.3 gigawatts of capacity — down from 7 GW. Next year looks even grimmer, the company said, with the volume of shipped orders expected to be about 5 GW.
The company said its production capacity is about 9 GW.
Next year could be the “toughest year the wind industry has seen for many years,” if U.S. legislators do not extend the production tax credit, Vestas CEO Ditlev Engel said.
“We are going to look at our entire manufacturing footprint in the second half,” Engel said. “For good reasons, we don’t give any guarantees that there will be no more layoffs” (Flemming Emil Hansen, Wall Street Journal [subscription required], Aug. 22). — HP