Wind tower maker cutting about 20 percent of jobs

subscribe

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."

Related News

powerlines

Report call for major changes to operation of Nova Scotia's power grid

HALIFAX - Nova Scotia is poised for a significant overhaul in how its electricity grid operates, following a government announcement that will strip the current electric utility of its grid access control. This move is part of a broader initiative to help the province achieve its ambitious energy objectives, including the cessation of coal usage by 2030.

The announcement came from Tory Rushton, the Minister of Natural Resources, who highlighted the recommendations from the Clean Electricity Task Force's report. The report suggests the creation of two distinct entities: an autonomous system operator for energy system planning and an independent body for…

READ MORE
undersea cable

Fish boom prompts energy conglomerate to spend $14.5M to bury subsea cables

READ MORE

pickering ngs

Time running out for Ontario to formally request Pickering nuclear power station extension

READ MORE

doug-ford-new-stance-on-wind-power-in-ontario

Doug Ford's New Stance on Wind Power in Ontario

READ MORE

wisconsin nuclear power plant

We Energies refiles rate hike request driven by rising nuclear power costs

READ MORE