Vestas to scale back production facilities in Europe

In Denmark, Vestas will lay off approximately 1,275 employees, primarily at Vestas Blades in Lem and Nakskov (in total approx 935 employees); at Vestas Nacelles in Viborg, Ringkøbing and Lem (in total approx 190 employees); and at Vestas Control Systems in Hammel and Lem (in total approx 120 employees). The remaining closures are at Vestas' UK, Newport, Isle of Wight facility, which employs about 600 people in blade manufacturing. The Newport 100-strong blade technology R&D facility will be unaffected. 

The cutbacks have been blamed on low demand for turbines in Northern European markets such as the UK and Denmark, compounded by the recent financial crisis. Vestas will now concentrate on the growth markets of the US and China.

A source at Vestas explained that demand for turbines in Northern Europe was too low, and to keep the facilities open for the supply of turbines to the US and Asia markets was not viable. The US market will continue to be supplied from Vestas' Colorado facility.

Vestas has also opened a manufacturing facility in Inner Mongolia to supply the burgeoning Chinese market. The company is eager to gain a strong foothold in China, which is keen on promoting renewable energy generation. Vestas recently said it had sold 58 wind turbines to Datang Huolinhe Renewable Power Co. to build a wind farm in Inner Mongolia. And Vestas has also announced that it has designed a wind turbine specifically for the Chinese market. The company noted that over 90% of the components for the new turbine would be made in China.

The latest job cuts will be a huge blow to the UK market, which had earmarked low carbon technology manufacturing as a way out of the current recession. In the latest UK budget, the Government announced funding of £525 million the wind industry. This has come too late for the workers at Newport, but Vestas is confident it can meet any extra demand from its remaining "substantial excess capacity" in Northern Europe.

Vestas was the number 1 supplier of wind turbines in 2008, with 18% of the global market share (source - Emerging Energy Research).