MUNCIE, Ind. — Delaware County's great experiment in creating green jobs dependent on wind energy appears over.
Struggling Brevini Wind Division, a maker of large gearboxes, will cease operations in Delaware County at the end of August, company President Brian Richardson announced.
About 20 Brevini Wind employees, mostly machinists, computer numerical control operators and quality control, will lose their jobs or transition to other industries.
"While Brevini Wind may be ceasing operations in the United States, Brevini USA will remain, and we will work in a highly responsible manner to help mitigate the impact to our employees and the local community," Richardson said in a news release.
The Brevini USA subsidiary of Brevini Group's Power Transmission business unit, located in Park One/332 business park next to Brevini Wind's facility, employs more than 40 workers and will continue there, operating under a consolidated "One Brevini" corporate structure.
Richardson said the company will honor its obligations to the county and repay money for failing to create jobs in return for funds to develop the business. The company was originally to create 410 jobs, and paid $375,000 in penalties last year for failing to meet numbers. Richardson said the county will receive an $800,000 payment next spring, for a total of about $1.2 million to be returned to the county.
The workers who are losing their jobs will receive severance packages. Brevini Wind will work with other manufacturers and the Indiana Department of Workforce Development's WorkOne employment centers to help displaced workers find other jobs.
Richardson said Brevini is seeking a new company to purchase the property and building where Brevini Wind's U.S. operations are located. The manufacturing space includes heavy concrete floors and crane capacity. "For the kind of manufactures who utilize that, that space is in short supply nationwide," Richardson said. "We are actively working with commercial real-estate companies and will work with the local economic development board to help attract a new manufacturer to the property."
Brevini Wind worked to diversify into other industries when the wind energy business did not develop as expected, Richardson said, such as mining, oil, gas and even aerospace, where large gearboxes could be used. "Clearly, those markets have not developed or performed the way we expected over the last couple of years."
Brevini Power Transmission and Brevini Fluid Power are being combined into a single corporate entity. "Brevini Wind does not fit that model," Richardson said. "Brevini has decided to focus on its core business and close this facility."
A combination of forces conspired to doom Brevini's Delaware County wind venture, which was announced in 2008 and opened in 2010 to great fanfare, as the market for gearboxes for wind turbines was expected to take off.
Brevini to pay county $375K for jobs failure
Brevini's original data and market forecast indicated the U.S. would follow the European model and there would be a lot of expansion with wind industry and component manufacturing in the U.S.
However, federal production tax credits in the wind energy sector became an annual renewal. "That did not create a stable horizon for people investing large sums of money," Richardson said.
Brevini invested over $35 million in the county facility.
Another factor was a shift in the wind energy markets. Richardson said wind energy developers went back to the big three or four or five manufacturers. So what was a fragmented market became stratified. Up to 90 percent of the market was tied up by the big players and they had alliances with manufacturers in China and India. That excluded Brevini.
Another factor was engineering. Richardson said Brevini had developed a proprietary design in partnership with an original equipment manufacturer from Finland. That original equipment manufacturer had a very unique approach to the wind turbine nacelle, but it went bankrupt "and so Brevini was left with designs that did not anything that was in the field," Richardson said.
No other original equipment manufacturers were willing to take the risk on Brevini's design.
In the end, there was no market for the product.