Competition and falling subsidies are putting economic pressure on turbine makers in Europe, where this week two major manufacturers announced job and production cuts.
Denmark's Vestas Wind Systems A/S will scale down production of one of its blade types in its home market and in Germany, it said Sept. 27. Meanwhile, Spain-based Siemens Gamesa Renewable Energy SA announced it is laying off hundreds of workers in Denmark as it phases out production of direct-drive onshore turbines.
Vestas will let go of 590 workers — including contractors, at its facilities in Lauchhammer, Germany, and Lem, Denmark — who had been building the midsize V136 blade type now being scaled down. The company said it will invest in producing its other blade types — such as V117 and V150 — "according to market demand."
"Today's very competitive industry and the fast-moving energy transition means we must introduce new products and solutions where and when the market requires them," said Jean-Marc Lechêne, executive vice president and COO at Vestas.
Most of the redundancies will hit the Lauchhammer workforce, where the head count will be halved, while 90 people will be let go in Lem. The Lem facility, near Vestas' research and development center in Aarhus, will remain the hub of Vestas' development and production for its entire product portfolio, the company said.
Once seen as a prime example of the energy transition by employing former coal workers, the Lauchhammer facility had been anticipating market headwinds.
"The wind industry is mature," German subsidiary Vestas Blades Deutschland GmbH's then-managing director Hanne Dinkel said in 2017. "Following the pioneering mood in the first few years, we now face requirements which are typical in established industries. We are facing up to these expectations of professionalism and economic efficiency in Lauchhammer."
While those efforts ultimately fell short, Germany remains a key market for Vestas, the company said, with more than 14 GW of installed turbines, 11 GW under service and more than 2,300 employees after the workforce reduction.
'Difficult measures'
Siemens Gamesa is laying off up to 600 staff in Denmark. It noted that this move will also impact onshore blade production at its Aalborg plant, which will cease at the end of the year. Offshore blade production and development at the location will continue.
"These difficult measures are necessary as a responsible resolution to an increasingly competitive industry landscape," Andreas Nauen, managing director for Siemens Gamesa's Danish business, said.
While turbine prices have recovered in recent times, manufacturers continue to battle against pressures brought about by a shift to auctions for procuring renewables in many countries. Siemens Gamesa is in talks to buy certain European assets from troubled German manufacturer Senvion SA, which filed for self-administration April 17.
Elsewhere, turbine suppliers are also struggling because of the trade war between the U.S. and China, which is threatening to slow a long-awaited recovery in equipment margins.
