City of Jonesboro reacts to Nordex layoffs

JONESBORO, AR (KAIT) – Wind turbine manufacturer Nordex is trimming production and 40 jobs will be affected by the move at Jonesboro and Chicago locations.

According to a Friday morning news release by the company, Nordex will cut nacelle production at the Jonesboro facility. A nacelle is a cover housing that contains components of a wind turbine.

"I think everyone was optimistic about it. I don't think anyone thought this day would come," Jonesboro Mayor, Harold Perrin told Region 8 News.

The closure of the nacelle production line will mean the layoff of 40 employees beginning October 2013. The layoffs include production jobs at the Chicago facility as well.

There is no word on an official number of layoffs for the Jonesboro location. However, Nordex tells Region 8 News there are currently 50 employees at the Jonesboro plant.

"Y'know, I've been in business and I know that you've gotta make a profit," Perrin said.

According to Nordex, that profit wasn't happening.

"If you look across the United States, the wind energy industry, it's really been a difficult business to be in," Jonesboro Chamber of Commerce President and CEO, Mark Young said.

Nordex Jonesboro was announced with much fanfare in October 2008, as a $100 million project that would lead to 700 jobs locally. The workers would be paid an average of $17 an hour.

At most, the company employed 50. That under-utilization of Jonesboro's plant made the decision to lay off their employees "inevitable."

"This isn't about just our community. This is about the industry as a whole throughout the United States that has been challenged," Young explained.

Nordex also received almost $22 million in tax credits. According to an interview in early 2010 with Vice President of Production, Joe Brenner, about one third of that money had been allocated toward the nacelle plant. 

Production at the Jonesboro site officially started production in October of 2010.

Dr. Jürgen Zeschky, CEO of Nordex SE stated in Friday's 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.''

According to Nordex, the company will continue "sales, engineering, service, project management, training and support" at the Chicago and Jonesboro locations.

Nacelles for the North and Latin American markets will now be supplied by Nordex's factory in Germany.

The entire news release announcing the closure is as follows:

Hamburg, 28 June 2013 - Nordex SE announced today that the company will cease nacelle production at its Jonesboro, Arkansas facility after it completes the orders in its current pipeline. The decision was driven by the wind industry's global overcapacity and the continued uncertainty and instability of the US market. The decision will not impact the current year's business performance, as exceptional expenses were already accounted for in 2012 as previously reported.

Dr. Jürgen Zeschky, CEO of Nordex SE, explained, "This was an extremely difficult decision for Nordex. 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. With this decision we also increase our flexibility to react to US demand for our turbines out of one single plant in Rostock, Germany. We will be maintaining the extensive expertise in sales, engineering, service, project management, training and support which we have built at our Chicago and Jonesboro locations to continue the growth we have achieved through these challenging times."

Ralf Sigrist, President & CEO of Nordex USA, Inc. commented, "This is a sad day for all of us at Nordex USA. We will lose valued colleagues, who have done their very best for us, but the decision was inevitable considering the underutilization of our plant."

In the future, nacelles for the North and Latin American markets will be supplied from Nordex' factory in Rostock, Germany, using the global supply chain and logistics support based there. Service activities for all existing US wind farms are not affected by the closure of the US production. The training academy, the central parts storage and the repair facility in Jonesboro will remain in operation to support Service and Operations in the Americas. Around 40 employees will be affected with layoffs beginning in October 2013.

The restructuring of the company in the United States is in line with Nordex' strategy to position its operations to maximize capacity utilization. 

Now, city officials say they're focused on those being laid off.

"We're gonna work very closely to identify opportunities for those people so they can stay right here in Jonesboro," Young said. 

"That's the big deal," Mayor Perrin said. "We've got some other industries in town that've announced some expansion programs so hopefully the net effect of that will come down to zero as far as anyone being unemployed."

At the same time, the city plans to continue to recruit new business to Jonesboro.


"That can never stop," Young said. "Oftentimes in business, unfortunately things do happen like this and you have to be prepared to move forward."

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