LM Wind Power to cut 345 jobs, blames industry downturn, lack of political support

LM Wind Power, one of Grand Forks' largest manufacturers, announced Tuesday that it would lay off more than 300, citing weak demand and uncertain political support for the industry.

The reductions include 200 full-time production workers, 15 administrative staff workers and approximately 130 temporary workers and contractors, according to the company's statement.

LM's remaining workforce is 270, according to Dan Gordon, the company's human resources manager. The laid-off workers will stay on the job until Nov. 30.

LM Wind Power in Grand Forks manufactures turbine blades for wind power projects.

The announcement blamed industrywide contraction and federal inaction over the Production Tax Credit, a key wind subsidy set to expire at the end of the year.

U.S. demand for new wind power is likely to fall by 70 percent in 2013, the announcement stated, forcing the company to cut workers.

"LM Wind Power will continue to retain a strong commercial, manufacturing and service presence in the Americas region with over 740 employees at four strategic locations across Arkansas, North Dakota, Illinois and Texas," the announcement said.

LM is headquartered in Denmark and has had a Grand Forks facility since 1998. The company had 900 employees in 2007.

Cuts anticipated

Klaus Thiessen, president of the Grand Forks Region Economic Development Corp., said that LM's reductions were expected.

"We've been aware of potential challenges for months already," he said.

Thiessen said the Grand Forks facility remains one of the company's most productive plants and that LM has no plans to close it. He said the industry is in a readjustment period and LM will try to adapt by pursuing contract manufacturing and possibly building up its research and development branch in town.

"I have a sense of where the company wants to," he said. "The wind industry, in my opinion, isn't going to go away."

Gordon said that company will have a clearer picture of its direction at the end of the year.

"It is important to emphasize that the challenging situation in the U.S. wind market is not specific to LM Wind Power, nor to Grand Forks manufacturing facilities," according to announcement. "The whole sector is affected."

Earlier this month, Minnesota-based Otter Tail Corp. sold its West Fargo wind turbine plant to Trinity Industries of Dallas. The new owner has not announced what its plans are for the plant's 216 workers. Otter Tail also announced plans to sell its Oklahoma plant, employing 167.

LM also announced in August that it would lay off 134 workers at its Little Rock, Ark., facility.

Job Service North Dakota is putting together a response plan for the laid-off workers that would include events where job seekers can meet prospective employers.

Push for credit

The American Wind Energy Association, an industry advocate, said the layoffs are among thousands expected as a result of the Production Tax Credit's expiration.

The PTC, created in 1992, provides a 2.2-cent tax credit per kilowatt-hour of wind energy generated.

"Unfortunately, this is something we saw coming down the pike," said Elizabeth Salerno, AWEA director of industry data. They estimate that 37,000 jobs could be lost nationally in an industry downturn following its expiration.

According to AWEA, industry investments dropped by 73 to 93 percent following previous lapses of the credit. The expectation, if there is another expiration, is a drop of 65 percent. However, the most recent lapse was in 2004, and the industry has grown since then, Salerno said.

Thiessen and other local officials have been working with the North Dakota congressional delegation to push for extension of the credit.