Germany

Germany

Enercon to restructure German manufacturing footprint - updated

Enercon plans to set up 'centres of excellence' for nacelle and generator production and simplify its complex supplier structure

Enercon had launched a ‘transformation programme’ to return the company to profitability in November 2019
Enercon had launched a ‘transformation programme’ to return the company to profitability in November 2019

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Enercon has announced plans to restructure its production footprint in Germany by streamlining its nacelle and generator manufacturing.

It aims to set up ‘centres of excellence’ for nacelle manufacturing in Aurich and generator production in Magdeburg, the embattled turbine manufacturer explained.

This will involve pooling all its manufacturing processes and specialist knowledge for these components in two seperate locations. Currently, both sites produce nacelles as well as generators.

As part of the restructure, Enercon aims to integrate its external suppliers, it added. The Aurich-based manufacturer will move many of the "exclusive suppliers" and other splinter firms that make up Enercon's complex company structure in-house, according to the Ostfriesenzeitung (OZ) regional newspaper.

The German manufacturer explained that by doing this it aims to secure the two sites and retain expertise as it looks to target international markets and wait for the German onshore wind market to recover.

It had cut back its footprint in Germany and shifted production abroad, but now appears more optimistic on its domestic market.

Chief operating officer Jost Backhaus added: “We want to remain a technology leader in the future. 

“In order to ensure this, we believe it is crucial that we have direct access to the production processes for the most important main components. We want to establish state-of-the-art manufacturing technology in the centres of excellence, complete with automation and the latest processes and standards.” 

Enercon will set up a mechatronics ‘centre of excellence’ at its existing site in Aurich, Lower Saxony “in the next few months”. There, it will pool all manufacturing processes and specialist knowledge for producing machine houses, hubs and electrical components, it stated.

The manufacturer will set up a similar facility for its permanent magnet and separately excited generators at site in Magdeburg, Saxony-Anhalt.

Enercon had launched a ‘transformation programme’ to return the company to profitability in November 2019, as the German onshore wind market – the focus of its activities – ground to a halt, and the company headed towards a second loss-making year.

But the manufacturer has recently secured €1.15 billion in financing until the end of 2023, which its management team hopes will normalise relations with suppliers that may have feared defaults on payment

CEO Hans-Dieter Kettwig said: “Onshore wind energy will only bounce back in this country if this support continues in the future.

“That is why we have always made it clear that we stand by Germany as a location and will try to keep added value in this country to the greatest extent possible during our reorientation.”

But some some processes are simply not realistic in Germany anymore, which is why Enercon has moved processes such as blade production abroad, chief operating officer Jost Backhaus told the OZ in a seperate interview.

For a set of 3 rotor blades, the cost in salaries alone in Germany is €150,000, in India it's only €20,000, according to Backhaus. And transport will be cheaper when making blades for the Asian market, he added. "And we have big plans for Asia."

Enercon axed around 3,000 jobs and stopped domestic manufacturing to shift production to cheaper markets as part of cost-cutting measures.

There will not be further redundancies on top of the 3,000 announced last November, Enercon's head of HR, Momme Janssen, told the OZ. However, that number has not been reached yet, so more jobs will go go as part of the restructure. "We can only remain competitive if we merge our structures and slim down as much as possible," Janssen said.

CFO quits

Meanwhile, Enercon chief financial officer Thomas Cobet resigned from his role with immediate effect on 17 August. He had joined the company last year, having previously worked at Siemens Gamesa and many years at Siemens prior to the merger.

Martin Prillmann is taking over as interim CFO in addition to his role as chief restructuring officer.

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