Nordex Wind Turbine Plant to Stop Production in Jonesboro

by Lance Turner  on Friday, Jun. 28, 2013 6:37 am  

Nordex is ceasing operation in Jonesboro. The move will leave about 40 out of work. (Photo by Nordex)

A Jonesboro wind turbine plant that said it would eventually employ 750 people has halted production, cutting 40 of its 50 workers.

Nordex USA, the domestic unit of Germany's Nordex SE, said early Friday that it would cease nacelle production at the plant after it fills current orders. It said it will move production to its factory in Rostock, Germany, and that layoffs will begin in the fall.

In a news release, the company said its decision was based on "the wind industry’s global overcapacity and the continued uncertainty and instability of the US market."

More: See Nordex's news release on ending production in Jonesboro.

"This was an extremely difficult decision for Nordex," Jürgen Zeschky, Nordex SE's CEO, said in a news release. "We are reacting to the weakened demand from the US market, brought on by the unpredictable extensions of the Production Tax Credit (PTC), and the resulting low utilization rate of our US assembly plant. 

"We see great potential in the US and Latin American markets and are committed to serving those markets and increasing our installed base," he said. "With this decision we also increase our flexibility to react to US demand for our turbines out of one single plant in Rostock, Germany."

Nordex said it will retain its sales, engineering, service, project management, training and support operations at its Jonesboro and Chicago locations. But the move effectively ends Nordex manufacting in North America.

"Obviously we're disappointed about the decision to cease the nacelle unit in Jonesboro and move it to Rostock, Germany," said Mark Young, president and CEO of the Jonesboro Regional Chamber of Commerce. "Our concern is with the individuals impacted by this, and we're working very hard to make sure there are opportunities for those individuals to have employment opportunities right here in Jonesboro."

The move also thows into doubt the future of a nearby Nordex supplier, the Beckmann Volmer plant in Osceola. The German company broke ground on its $12 million plant in September 2011 and planned to eventually employ 300 workers making components for Nordex turbines. Calls to Beckmann Volmer were not returned on Friday.

The uncertainty of an extension of the Production Tax Credit dogged the wind industry throughout 2012. The tax credit, which was set to expire at the end of last year, let companies producing renewable energy pay a lower income tax rate by 2.2 cents per kilowatt-hour.

But gridlock in Congress made an extension of the tax credit look doubtful, which chilled activity in the wind industry. In April, Mitsubishi Heavy Industries Ltd.'s decided to suspend construction of a planned, $100 million wind turbine manufacturing plant in Fort Smith that was to have employed 400 people.

And in August, the state's first big wind energy player, LM Wind Power, laid off more than 200 of its Little Rock workers, or about half its state workforce.



Please read our comments policy before commenting.

Latest Arkansas Business Poll

Do you approve of the president taking executive action on immigration?