Acciona: Cuts will not hurt wind farm

Acciona Windpower on Monday cut 40 jobs at its West Branch assembly plant, reducing its workforce from 87 to 47 employees and halting its assembly line.

The company said the decision was “very difficult.”

“U.S. wind development declined sharply over the past year for reasons beyond our control,” read a company statement. “The reduction in our workforce is necessary to meet the current volume of production while we work to complete new turbine supply agreements.”

Acciona Windpower, a subsidiary of Acciona Energy, stated that it “remains committed to the North American market.”

“We have every confidence in the quality of our product and our workforce,” read a statement sent to the media just after noon Monday. “We will continue to maintain production capacity at our West Branch facility and provide operations and maintenance services for our fleet of North American wind turbines per our contractual obligations. We will also continue to focus our sales and business development efforts toward the goal of ramping up production.”

CEO Joe Baker said Tuesday that Acciona Windpower’s Chicago office did not see layoffs, but Acciona Energy, which shares office space there, announced 10 layoffs the week before.

“We are committed at the highest level,” he said. “We consider this a ‘pause.’ We’re here for the long haul.”

He stressed that the reduction-in-force was “not performance-related.”

“We needed to make the business the right size and fully plan to produce here next year,” he said.

Baker said remaining staff are taking care of existing wind farms, or ordering parts for those maintaining the wind farms, or trying to secure future contracts for more turbine sales.

He said it takes time to get from a verbal agreement to a negotiated contract, sometimes as long as six to nine months. And then two to three more months to order and receive delivery of parts to begin assembly.

Acciona hooked up the two 3-megawatt wind turbines at the Pioneer Grove Wind Farm in Mechanicsville just before Christmas. They are connected to the Central Iowa Power Cooperative.

“If we got a contract by the end of March, we could be building by this time next year,” he said, but stated there are no contracts that close to closing. He said the staff let go on Monday asked the same questions.

Acciona’s staff, before Monday, was able to build 80 3-megawatt turbines a year and the plant has the capacity to do three times that.

The company had been producing 1.5-MW turbines, but Baker said the industry is “moving to bigger machines.”

Matt Hills of West Branch, a procurement specialist for Acciona who purchased components for the turbines built here, was one of the employees let go. He said Baker made the announcement Monday morning.

“He came right out and said it,” Hills said. “He hoped they didn’t need to do it. We were told to go back to our respective areas and supervisors would let us know who (was terminated) and what to do.”

Hills, who is married with three children, said the news was not unexpected, but “definitely rough” to hear.

“I’ve been with them for more than five years,” he said. “It’s an industry I’m proud to work for. They’ve got great people and good working relationships.”

Hills said the past year has included industry fluctuations and uncertainty about whether the U.S. Congress would extend the Production Tax Credit. The PTC gives 2.2 cents credit to every kilowatt of electricity produced and Congress extended it just before the Dec. 31 deadline.

Baker said it was good to see the PTC extended, but the uncertainty hurt business, too.

“This is a project business,” he said. “It takes 12 to 18 months for the impact to be felt. … If they passed the PTC at the beginning of 2012, we would (have) orders in the shop, not be letting people go.”

Hills said he counted 67 employees in that 9 a.m. announcement, and anyone was allowed to ask questions of Baker. Then, when individuals learned they had been chosen to be included in the cuts, they were allowed to ask more questions, Hills said.

“We had about an hour to sweat,” Hills said.

Most questions were about wages and benefits, Hills said. The company offered severance packages and paid them for unused vacation time.

“They also asked about the permanency of this,” Hill said, and the answer was that it would not be like a layoff as individuals would need to reapply should jobs reopen.

The company has plans to dedicate the site in the spring, inviting local and regional partners and stakeholders, as well as the media.

Acciona Windpower CEO Joe Baker said the demonstration site would not be affected by the job cuts.

Peter Gray, spokesman for Acciona Energy North America, stated the company needed to make some mechanical adjustments shortly after connecting to CIPCO.

“Now the wind turbines are performing well and meeting our expectations,” he wrote in an e-mail statement. “We are collecting operations data over the long-term to determine the specifics about energy production at the site.”

The 6-MW wind farm was built as a demonstration site since Acciona had only produced and sold 1.5-MW turbines in North America before now. It has produced 3-MW turbines since 2011 in Europe but is now offering the models here.

“We have had potential customers come to visit the site,” Gray said. “And we’re planning more visits later in the year.”

The test site turbines include 116-meter rotors. One turbine sits atop a 92-meter steel tower, the other is built on 100-meter concrete tower.

The company said concrete towers are an innovative option that allows building on-site.

Acciona last month also began offering a 125-meter rotor. With a greater “swept area” — 12,300 square meters — the new rotor is designed to capture more wind in low-wind sites.

The new rotors are built for the 3MW turbines which can accommodate them with 120-meter towers.

“With the introduction of the AW 125/3000, Acciona Windpower now has rotor options that enable almost any site globally to deliver maximum production at a lower cost of energy,” Patxi Landa Exparza, director of Global Business Development, said in a statement.

Acciona spokesman Eric Schneider said Pioneer Grove will keep the 116-meter rotors, but while the 125-meter rotors would need taller towers, they would not require changing the design of the turbines, which are built at the West Branch plant.

The company expects to see the first 125-meter rotors installed by the end of the year.