Siemens Gamesa to 'hibernate' Fort Madison and Kansas plants, putting 263 employees out of work

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Siemens Gamesa announced Friday that its Fort Madison and Hutchinson, Kansas, facilities will be placed on hibernation in June and July, respectively, putting 263 employees out of work, at least temporarily.

It is unclear when the Midwest blade and nacelle manufacturing plants will resume operations.

"Siemens Gamesa is continuing to pursue new orders while monitoring the onshore market situation in the U.S.," a spokesperson for Siemens Gamesa said. "The precise dates for resumption of production will be determined based on those factors, and therefore no decision on a specific date has been made."

The affected 171 Fort Madison and 92 Hutchinson employees were notified early Friday during meetings with plant management.

Siemens is working with local agencies, such as Workforce Development and chambers of commerce, to provide additional support where available.

Lee County Economic Development Group will be working with Siemens and IowaWorks to provide displaced workers with support, said Dennis Fraise, CEO and senior economic developer of LCEDG.

Fraise said there are ample job openings in Lee County that need to be filled.

"Our thoughts go with the people who are being displaced, but on the positive side, there are a tremendous number of openings right now, so we'll certainly be engaging with Siemens officials on that," Fraise said. "There's probably not a company out there that doesn't have some kind of opening right now.

"It's a, we hope, temporary setback for Lee County and southeast Iowa. We anticipate that we'll see that plant back up and running, hopefully sooner rather than later."

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The laid-off workers will continue to be paid during the 60-day Worker Adjustment and Retraining Notification period, as well as receive severance packages that include severance pay, benefits continuation, career counseling, resume preparation and job replacement assistance.

A spokesman for the company said Siemens Gamesa hopes to rehire "highly skilled former employees where appropriate and possible" when the plants reopen.

"Where that is not feasible, the company has a comprehensive training and development plan for new employees and will reach out to the U.S. job market to find suitable candidates," he said.

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A small core team will remain at each facility for maintenance purposes, as well as to prepare them for ramping back up when the situation changes.

According to a news release issued by the company, the decision to temporarily shut down its only two manufacturing and assembly facilities in the U.S. was driven by a slowdown on the onshore market and a lawsuit filed against Siemens Gamesa by competitor General Electric Co. alleging trade secret theft and patent infringement.

The International Trade Commission ruled in Siemens' favor, deciding there was limited infringement on GE's claims regarding its low-voltage patent, which, according to Siemens, targets only full converter wind turbines running pre-2021 versions of software that Siemens no longer sells or imports. But Siemens had been temporarily prevented from pursuing orders during the determination period.

That same suit also contributed to Siemens' most recent layoffs in February, when the company announced it was reducing its workforce by 32%, putting 131 Fort Madison and 69 Hutchison workers out of jobs.

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Since the ITC ruling, the company said, the U.S. onshore wind market has slowed in anticipation of new climate legislation and accompanying renewable energy incentives. That, combined with long lead times on wind energy projects, has resulted in a production gap.

“The hibernation of our manufacturing and assembly facilities is an unfortunate but necessary measure to address the current challenges in the U.S. onshore wind market,” said Shannon Sturgil, CEO of Onshore North America. “We continue to pursue new orders and remain fully committed to finding a path in support of our Fort Madison and Hutchinson manufacturing facilities.”

The company said the hibernation of the two facilities will not impact Siemens Gamesa’s delivery of current onshore contracts, and is unrelated to the company’s offshore wind business, including further development of the Coastal Virginia Offshore Wind commercial project agreements.

Siemens Gamesa said it has installed more than 13,000 wind turbines in North America, providing about 29 GW of clean power, enough for approximately 8 million homes.

Since the Fort Madison facility opened in 2006, workers there have produced more than 20,000 wind turbine blades delivered to projects in the Americas, Europe and Africa.

Workers at the Hutchinson plant, which opened in 2010, have produced about 5,500 nacelles, which sit atop the wind tower, supporting the rotor and housing components for electric power generation.

This article originally appeared on The Hawk Eye: Why Siemens Gamesa is 'hibernating' its Iowa and Kansas plants