LM Wind Power said Tuesday that it will close its wind blade manufacturing plant at the Port of Little Rock later this year amid declining demand for its product.
The company said the decision to close was not related to the COVID-19 outbreak, though it had temporarily closed some operations in Europe due to the virus. Its parent company, GE Renewable Energy, said it would provide the plant's 470 workers with a minimum of four months pay.
"Due to declining demand for the specific blades made at the Little Rock facility and the need to streamline operations, GE Renewable Energy today announced that we will close our LM Wind Power site in Little Rock, Arkansas," a GE spokesperson said in a statement.
"We understand that this is a difficult time to announce this decision and are taking a number of steps to provide additional support for our employees during this time, including continued pay for a minimum of four months. We will also pay their health insurance premiums for an additional six months to ensure they have coverage through at least the end of the year."
GE operates another LM Wind Power plant in Grand Forks, North Dakota, which will remain open. Both Little Rock and Grand Forks make 44.1-meter wind turbine blades. But Grand Forks also makes a larger, 62.2-meter blade, which the industry is moving to "as part of the effort to try to drive down the cost of renewable energy," the GE spokesperson said.
"What you see is essentially more powerful machines with bigger blades that can produce energy for less," the spokesperson said.
LM Wind Power, previously known as LM Glasfiber, announced plans to come to Arkansas in July 2007 and opened its $150 million North American headquarters at the Port of Little Rock in 2008. GE Renewable Energy announced in 2016 that it would acquire the Danish company, which has operations throughout the world.
Executives originally projected employing as many as 1,000 workers within five years of opening. As of 2016, about 450 people worked for the company in Little Rock. That year, the company consolidated two Little Rock operations at the city's port, building a new 44,000-SF warehouse there.
"Obviously, having LM as part of this community and the unique products that they make has been something that we've used as a flagship, when talking to other potential manufacturers. We understand that time changes and technology changes," Jay Chesshir, executive director of the Little Rock Regional Chamber, told Arkansas Business.
"But we're still very saddened that that plant will be closing, and we will be working diligently to try and find a suitable company to look at that property and the buildings that are there and also look at replacing those jobs," he said.
Chesshir said the chamber had already reached out to prospects with news that the LM Wind Power facility would be available later in the year.
"We appreciate all that LM has done while here and wish GE the best as they go forward, and, hopefully, we'll find another project that we can work with them on at some point in the future," he added.
Gov. Mike Beebe's administration recruited the company, which received millions of dollars in incentives with help from the state's economic development office. It was among the first to receive money from the governor's Quick Action Fund, which the Legislature created in 2007.
"We never like losing jobs, especially a company we've worked so hard to help prosper locally," Mike Preston, secretary of Commerce Department, said Tuesday. "There are market forces at play and this is an international enterprise we hate to see go away."
Preston told Arkansas Business that LM Wind Power "long ago fulfilled" its incentive agreements.
"There are no claw backs involved," he said.
The closure is a loss for the port. But officials there are already looking to new tenants, including Amazon, which is set to build a major distribution center there that could employ hundreds of people. Little Rock city leaders last week unanimously approved the $3.2 million sale of 80 acres in the port to an entity backed by the e-commerce giant.
"LM Wind Power has been a great port tenant and partner since 2008," Bryan Day, the port's executive director, said. "While we are saddened by the news of their closing, we understand that economies continue to change and evolve. The port will work with LM Wind Power and the Little Rock Regional Chamber of Commerce to help market the site to other industries."
Day said officials at the port were heartened by the Amazon project, as well as other new tenants, including HMS Mfg. Co. of Troy, Michigan, which announced last fall that it would open a 550,000-SF injection molding facility there, creating 90 jobs over the next two years; and Czech gun-maker CZ-USA, which announced plans a year ago to put a $90 million gun manufacturing operation and North American headquarters in the port that will employ 565 people.
"Collectively, they will employ thousands of Arkansans, and we remain focused on growing jobs in central Arkansas," Day said.
