United States

United States

Analysis - Nordex and its decision to end US manufacturing

UNITED STATES: Nordex's recent announcement that it will end US nacelle production could be a a sign of the times with smaller manufacturers struggling against larger rivals in major markets such as the US or Europe.

Nordex nacelle production to end in Arkansas
Nordex nacelle production to end in Arkansas

Google Translate

The solution to this is to move aggressively into emerging markets. However, a large proportion of these orders can be served from the company's home base.

Nordex has said that it will fill its current pipeline for the US and Latin America from its sole US nacelle plant in Jonesboro, Arkansas. After that, nacelles for the Americas will be made in Rostock, Germany. Lay-offs of about 40 staff in Jonesboro will begin this autumn. The company currently employs 186 people in the US, including service and training staff in Jonesboro and management in Chicago. Its Jonesboro service facility will remain open.

A spokeswoman for Nordex USA would not comment on the size of the company's remaining Americas pipeline, except for the 117.6MW of Uruguayan orders for the low-wind N117 2400 announced in January. "I cannot confirm the current [US] pipeline as Nordex is evaluating the best production locations," said Naomi Lovinger, head of US communications. No orders are outstanding elsewhere in the Americas.

Smaller original equipment manufacturers (OEMs) have also been hit in the US by the demise of manufacturer Clipper, which spooked buyers because of concerns over warranties and spare parts. "A lot of [buyers] are nervous about the long-term viability of OEMs that are not backed by industrial conglomerates such as Siemens and GE," said Amy Grace, lead US wind analyst at Bloomberg New Energy Finance (BNEF).

Nordex sold 275.4MW of turbines last year in the US, according to BNEF, giving it a small market share of just over 2% in the US during a year of record installation. The US market is expected to contract severely this year and next, and may not reach the level of 2012 again for another decade.

When Nordex opened its nacelle plant in Jonesboro in 2010, it said the facility would have a peak annual assembly capacity of about 750MW. The entire Jonesboro manufacturing hub, which was to include a blade plant that was never built, was to employ up to 700 people. But employment in Jonesboro peaked at about 100, said Joe Holmes, spokesman for the Arkansas Economic Development Commission (AEDC).

For the 14,000 square-metre Jonesboro plant, Nordex was awarded up to $22 million in tax credits from the US government's programme for renewable-energy production facilities. That amount was never drawn upon, said Lovinger. The company is in discussions with Arkansas officials over repaying some state money, she said.

According to AEDC's Holmes, the talks are cover the $3.9 million paid from the governor's Quick-Action Closing Fund to Nordex and to the City of Jonesboro, in the latter case for infrastructure. She said the grant size was based on numerous factors, including the prospect of 700 jobs. Nordex will be responsible for repaying a proportion of the money paid both to itself and to the city.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in