Vestas the multinational company announced the cease of activities at its facilities in Ólvega (Soria), where they manufacture wind turbine control systems, as well as the reduction of the production capacity at the blade factory in Damiel (Ciudad Real). These actions arise as a result of the current crisis and the poor outlook for the coming years. According to Vestas, the main reasons of the closure are that the entire wind energy
business and the reality in many markets around the world have changed due to the critical global financial situation, regulatory uncertainty and expected lower growth rates – especially in OECD countries.
The reduction in the workforce is aimed at adjusting its organisation to the future demand and activity levels expected in the next years and reducing fixed costs to ensure Vestas’ profitability in the long term.
On the 12th of January 2012, Vestas notified the Stock Exchange through Announcement No. 3/2012 regarding its global restructuring plan that affects 2.335 employees worldwide. On the 22nd of August 2012, Vestas announced in its Second Quarter Financial Report that it would step up the initially planned changes, resulting in a further reduction of 1,400 employees worldwide. This decision is based on the need to adjust Vestas’ global organisation and production capacity to an expected production activity level of 5 GW in 2013 compared to the projected 6.3 GW of 2012, which means a 21% decrease.
According to Vestas reducing fixed costs will enable them achieve consistently stable positive margins. With the plans announced in August, the company will increase its fixed cost reduction from the initially planned150 million to 250 million euros by the end of this year, equivalent to a 34% increase. A significant figure when compared with the retrenchment of workers, prompting predictions that Vestas foresees that in 2014 and following years, the situation will worsen in Spain.
The regulatory uncertainty and the economic and financial situation in recent years have affected the development of wind energy in Spain. According to the Spanish Wind Association (AEE), so far this year there have been almost no new orders for wind turbines in the domestic market. This adds to the fact that orders in 2011 didn’t reach the 100 MW mark, and in 2010 were less than 220 MW, compared with an average of over 1,500 MW in previous years.
Spanish manufacturers have previously warned that the industry’s workload barely covers half its production capacity.
Miguel Picardo, Vestas Iberia General Manager says: “….in the long term it is not sustainable that 95% of the local production is exported to other countries. Therefore, we have no other option, but to adapt our organisation and our costs to the reality of today”s market in Spain and in the rest of the world”. And he concludes: Vestas guarantees that the company’s customer commitments in the Spanish market will not be affected by the changes in the Spanish production set- up”.
Negotiation with workers and status of other plants
Earlier today, Vestas has informed the workers’ legal representatives as well as the employees in the production facilities in Olvega and Daimiel about the processes that begin today. Vestas now enters a negotiation process with the employees’ legal representation, which Vestas expects to resolve through dialogue in the best possible manner.
Since 2003, the Ólvega factory has been a key facility in the manufacturing of control panels, special cabinets that manage the electrical current, regulate communications and are responsible for managing the correct functioning of the different parts of a wind turbine. Over the past few years, the plant has been the only Vestas facility worldwide that produces panels for the V52 turbine, as well as other panels for the V90 intended primarily for the European market. It currently has a total of 96 employees.
The Daimiel factory (Ciudad Real) became operational in July 2008 and is dedicated to the manufacturing of blades for the V90 turbine. The plant employs today more tan 500 employees. The change to this factory’s production capacity announced today will affect approximately 30% of the workforce.
At this point in time, the nacelle and hub factory in Villadangos del Páramo (León) cannot guarantee the renewal of all temporary
contracts due to the ongoing global reorganization. The plant currently employs close to 550 employees, and less than nine per cent are employed on a temporary basis.
The plant in Viveiro, which manufactures generators for the 2MW and 3 MW Vestas platforms, has currently a stable production plan, and therefore no adjustments to its current production level are expected.