Friday, January 9, 2009

Windmill-blade plant announces layoffs in Little Rock

The Morning News

Local News for Northwest Arkansas


Windmill blade maker announces Little Rock layoffs

By James Jefferson
THE MORNING NEWS
LITTLE ROCK -- In a sign the economic crisis could calm Arkansas' soaring wind energy industry, the first of three planned windmill blade manufacturers to begin production in the state announced Tuesday it would lay off more than 150 workers.

LM Glasfiber experienced rapid growth last year but said business has slowed as developers find it harder to finance projects because of the national credit crunch.

The Danish firm announced plans for its Arkansas operations in July 2007, predicting its work force would grow to more than 1,100 within five years. Tuesday's announcement came less than a year into production.

The company said it would keep more than 350 employees in Little Rock. That includes about 60 who will transfer from a plant that is closing -- originally a training facility -- to the main plant at the Little Rock port. The transfer is in preparation for round-the-clock operations in Little Rock and is expected to be complete within 60 days.

"We remain strongly committed to our North American operations, including our new regional headquarters in Little Rock," said Randy Fox, vice president and general manager of North America operations.

Fox said as recently as three months ago the company was hiring 60 to 70 workers a month in anticipation of projects that have since been scaled back or canceled. He said the announced layoffs were permanent and did not rule out further job cuts.

"We hope this is it. We don't want to go at this piecemeal," Fox said. "In this environment, two or three months is a long time. If things change, we'll have to react accordingly."

Just last month, Gov. Mike Beebe hinted Arkansas was in line for a fourth windmill manufacturing operation.

Besides LM Glasfiber, Polymarin Composites USA Ltd. plans to begin operations in Little Rock this year along with Wind Water Technology, making windmill blades and turbines. Those operations comprise a $20 million investment and a projected work force of 800 employees. Also, Nordex USA Inc. announced in October plans for a $100 million wind turbine plant in Jonesboro that is expected to employ 700 people.

But a Beebe spokesman acknowledged Monday the administration was aware of rumblings of possible trouble in the industry.

North Dakota wind tower manufacturer DMI Industries announced layoffs Sunday six months after publicizing plans for a major expansion. The company cited significantly lower than expected production demands for 2009.

"We've been hearing, even before (the DMI) announcement, that the wind industry is seeing some slowdown with the rest of the economy," Beebe spokesman Matt DeCample said Monday. "We don't know what the extent of the impact in Arkansas will be."

Beebe suggested Tuesday that LM Glasfiber's announcement was not surprising considering the economy and the company's rapid growth in Arkansas.

"They had ramped up faster than we had even anticipated, and by cutting back the 150 they're probably still on about the same course," the governor said. "But it's a reflection on the national economy."

Beebe said at their last meeting the nation's governors decried Congress' failure to extend the federal wind energy credit.

"What that does is, that creates uncertainty in those markets. It creates an uncertainty in that whole investment area. And when you do that, you're sending a mixed message," he said.

Fox said LM Glasfiber is confident growth will return, though he added "the time between ending this credit crisis and getting back to sustained growth -- you'd need a crystal ball to say how long that's going to be."

Frank Epps, president of Polymarin parent company EWT Americas, said Tuesday the company pushed back hiring of senior management in Little Rock during the fourth quarter of last year, in part because of the souring economy.

That hiring is taking place only now, which Epps said could push back the rollout of the first blades manufactured in Arkansas by several months this year.

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