Gamesa plant closing; 62 jobs lost; Facility opened in 2006; started layoffs in late 2009

EBENSBURG - Gamesa USA announced Tuesday that it will close its Fireblade LLC turbine-blade manufacturing plant in Cambria Township on March 31, a move that will cost the area 62 jobs.

While union and county officials said the announcement was a disappointment, few said it's a surprise.

Gamesa USA officials said Tuesday morning it will close the 8-year-old plant, located in the Cambria County Industrial Park, as the company looks to move south and west.

"The decision was driven by a shift in our customer market ... requiring us to alter our manufacturing and supply chain strategy to remain competitive," said Frank Fuselier, Gamesa general counsel, in an email.

Fuselier said the Madrid-based company is aware the decision will impact employees and their families but said the move was necessary to keep energy costs low and maintain a strong market presence.

He disagreed that the move is an indicator of the future of Gamesa in the state, and pointed to several wind farms, including ones in and near Blair County, as well as continued operations at a Bucks County plant, as evidence that the company is still successful.

Others are not so sure.

"I think that [Gamesa] thought the market would be a little more in their favor," said President Cambria County Commissioner Douglas Lengenfelder. "And when market realities strike, you know, business being what it is, they're not going to continue in business if they're losing money."

Lengenfelder said Gamesa's business model, which relied heavily on federal green-energy and tax-credit subsidies, was not sustainable - even with a favorable local business environment.

"It probably shouldn't surprise anybody, from the layoffs we've seen for a couple years," he said.

The plant, which opened in 2006, began layoffs at the end of 2009, when 141 of the plant's 238 workers lost their jobs effective New Year's Day 2010.

Officials said 46 employees were given the opportunity to take permanent jobs elsewhere in the company, while 62 were given a 16-week severance buyout and the remaining 33 were furloughed.

The company said at the time that the global economic crisis led to fewer contracts and projects, cutting the need for turbines, but they were hopeful the economy would pick up, and the industry would see more growth.

And it did, for a time.

Gamesa officials said in 2010 that they invested more than $80 million in the facility over the last four years for construction and an expansion, and that operations were upgraded for a new G90 blade.

Two new wind-farm projects were announced the next year, including Chestnut Flats in Logan Township.

The company had nearly 300 employees then, according to reports.

But the success didn't last, and the company announced more plant furloughs in July 2012, affecting 73 employees. A second layoff announcement came in November 2012 for 92 of its Cambria County plant workers.

This time, the company blamed the anticipated expiration of the American Renewable Energy Production Tax Credit, which provided 2.2 cents per kilowatt hour for wind and geothermal energy.

The credit was renewed over the New Year's holiday, but because wind farms need between 12 and 18 months for development, full recovery would have taken two years - time the company, apparently, did not have.

Wayne Donato, District 10 staff representative for United Steelworkers of America Local 2635, said Gamesa only has itself to blame for the plant closure and said the state and several green-energy groups fought for the plant, the company's first in America.

"What folks should know is that this was all totally preventable," he said. "Thirty-seven percent of new power generation in the U.S. in 2013 was through alternative energy sources. Everybody knows this is the direction to go."

While several of Gov. Tom Corbett's critics have accused him of downplaying wind energy in favor of natural gas, Donato said state and federal governments gave Gamesa millions of dollars in grants, paid to widen highways and intersections for transportation and provided the company with plenty of incentives to produce.

"We think that any of the negativity within Gamesa and its relationship in the marketplace is purely of its own doing," Donato said. "Gamesa made its own bed as far as that's concerned."

Fuselier said the company has not decided what to do with the soon-to-be shuttered plant, but other officials said they hope another corporation will be able to find a new use for it.

Township officials did not return calls for comment, but Lengenfelder said the county will be working with the employees to find them jobs through retraining and placement programs.

"We hope that we have the social safety nets in place to take care of these folks," Lengenfelder said.