Wind tower maker cutting about 20 percent of jobs

WEST FARGO, NORTH DAKOTA - Wind tower manufacturer DMI Industries says it is cutting about 20 percent of its work force due to declining demand from developers struggling to get financing for wind projects. About 60 people at the company's West Fargo plant will lose their jobs.

The announcement came six months after Fargo-based DMI announced a major expansion to add 350 jobs plants in West Fargo and Oklahoma. The cuts will be spread across DMI's three sites in West Fargo, Tulsa, Okla., and Fort Erie, Ontario, company spokeswoman Belinda Forknell said. She did not have specific numbers for the Oklahoma and Ontario plants but said the cuts for those two would total about 90.

"We really believe this to be a short-term setback," Forknell said. "It's unfortunate because we had been gearing up for increased volume."

Analysts say the alternative energy industry has been hurt by falling prices of oil and other commodities, and the tight credit market. Some of the biggest investors in the wind industry — such firms as AIG, Lehman Brothers and Wachovia Corp. — have struggled recently, with Lehman Brothers filing for bankruptcy last year.

"I can't speak specifically to the DMI situation, but access to credit is difficult even for the most highly rated borrowers," said Joseph Muscat, Ernst & Young's Americas director of cleantech and venture capital. "These are short-term realities. The long-term trends are still remaining very positive."

Last June, DMI announced it was adding as many as 75 employees to its West Fargo plant as part of a $20 million expansion to increase its production of wind towers.

Seniority was considered in deciding the cuts, Forknell said.

"Obviously we're all disappointed, but we feel we're still well-positioned for the future," Forknell said. "This is something that just needs to work itself out."

The company said that even with the cuts, it still has more than 150 workers more than last year, and a total of more than 750 employees in its three production facilities.

DMI's statement said "difficult credit conditions continue to impact the ability of wind energy developers to secure needed project financing."

"We remain committed to the wind energy market and have confidence in its outlook for the future," DMI president Stefan Nilsson said. "Nevertheless, we are required to make the reductions at this time in light of the downturn for wind farm projects, which we expect to last through this year."

DMI is a unit of Otter Tail Corp. of Fergus Falls, Minn. The company also makes equipment for other industries, including agricultural processing, ethanol production, and oil and gas extraction.

"I don't want to minimize how challenging this period of time is going to be for some of these companies," Muscat said. "It's going to take companies making tough decisions. Companies who do make it through this period will make it out much stronger."