Vestas to keep on cutting

Nov 7 - McClatchy-Tribune Regional News - Sharon Dunn Greeley Tribune, Colo.

 

Vestas' cost-cutting is far from over.

The company today announced it planned to cut global workforce down another 3,000 people by the end of next year -- 1,000 of which will come before the end of this year.

The company last summer announced it needed to cut more than 3,000 jobs worldwide to fit within a tightening industry to get its base down to 19,000 by the end of 2012. But that base will now shrink to 18,000 by the end of the year, and to a planned 16,000 by the end of 2013, according to its third-quarter earnings report.

The cuts are expected to save 150 million euros by the end of 2013, or about $193 million in U.S. dollars -- a grand total of 400 million euros since 2011.

In an interview with Bloomberg today, company CEO Ditlev Engel acknowledged continued tough times coming next year.

"We have back in November 2011 said we had to deal with a tough 2012 and tougher 2013, and that is what we have been adjusting to all along," Engel said in the Bloomberg report. "We are preparing for it to be a very tough U.S. market in 2013."

In Colorado, the losses came to about 500 people this year alone, most of which came from its Weld County manufacturing plants. The company also cut its research and development office, and trimmed staff at its Pueblo tower factory, and Brighton blade and nacelle plants. Most recently, it cut about 200 people from its Windsor blade manufacturing plant.

Worldwide, the company made several other cuts to stay afloat, including selling a tower factor in Denmark, closing a manufacturing plant in China, consolidated sales and business units in Asia, and scaled down its activities in India, to name the most significant.

But more are bound to come.

"Due to the slowdown in the wind turbine market and the need to increase the organization's scalability, Vestas is evaluating its manufacturing footprint and has initiated a process to identify outsourcing and divestment opportunities in order to involve its suppliers in larger parts of the production than is the

case today," according to the company's third quarter report to the market. "This could mean divestment of production facilities. The intention is to further increase the manufacturing flexibility and to reduce Vestas' capital requirement."

Colorado's facilities are all less than five years old, with its first plant in Colorado coming in 2008 in Windsor.

According to the Bloomberg interview report, Engel said some staff reductions will come selling facilities, meaning Vestas workers may retain jobs by working for another company. Still other vacancies will come through attrition, he said.

Vestas continues to operate in limbo as the U.S. Wind Production Tax Credit remains precarious. The tax credit, given to those who produce wind power, is set to expire at the end of the year.

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