Vestas Wind Systems A/S is expected to announce Thursday organizational changes that may cut thousands of jobs at the worlds biggest wind turbine maker.
As many as 3,000 of Vestas's more than 23,250 employees may lose their posts, Jacob Pedersen, an analyst at Sydbank A/S told Bloomberg news agency. Vestas, based in Aarhus, Denmark, said on Nov. 9 that it wants to become a "leaner" company by reducing annual fixed costs by $192 million.
A "significant change of the whole organization" will be announced Thursday, according to a statement from Vestas on Jan. 3. Vestas Supervisory Board Chairman Bent Carlsen told Dow Jones Newswires that the cost-cutting and reorganization plan will include job cuts and outsourcing some functions to external suppliers.
The anticipated layoffs aren't expected to immediately impact Colorado, where Vestas has spent more than $1 billion to build four plants, Maurice Rosenthal, an analyst at ING Groep NV in Brussels to Bloomberg.
But the greater threat to Colorado's jobs and economy looms at the end of this year when federal tax credits supporting wind power are set to expire.
Vestas Chief Executive Officer Ditlev Engel said in November that U.S. sales may "fall off a cliff" unless the federal government extends tax credits supporting the industry beyond 2012, according to Bloomberg. The so-called production tax credit, or PTC, gives an incentive of 2.2 cents a kilowatt-hour of wind power.
The news did not rattle a business development leader in Brighton, where Vestas has two factories producing wind turbine blades and turbine housing equipment.
"I dont think they would have invested over $300 million in Brighton and $1 billion in Colorado and then cut back," Ray Gonzales, president of the citys Brighton Economic Development Corp., told Bloomberg.
Engel, 47, is under pressure after twice slashing Vestass sales forecasts since October and abandoning a 2015 target for $19 billion of sales and a profit margin of 15 percent before interest and taxes, Bloomberg reported. Chinese manufacturers led by Xinjiang Goldwind Science & Technology Co. and Sinovel Wind Group Co. have grabbed market share from Vestas, squeezing its margins.
Since 2007, the Vestas plants in Brighton, Windsor and Pueblo have created about 2,500 jobs. State and local governments have provided at least $6.5 million in incentives to the company.
"We expect our Colorado manufacturing facilities will be busy throughout 2012, making component parts for these orders, as well as exporting components to other markets in the Americas region, including Mexico, Brazil and countries in Central America," Andrew Longeteig, Vestas spokesman in the United States, told 7NEWS.
Martha Wyrsch, Vestas president of sales and service for North America, said Tuesday that she hopes the U.S. Congress will extend the production tax credit as lawmakers have seven times since 1999.
"Along with other industry leaders, we have been engaged in activities designed to extend the PTC as soon as possible thousands of U.S. manufacturing jobs, both at Vestas and other wind energy suppliers, depend on it," Wyrsch said.
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