Hutchinson plant hit with more layoffs, 'hibernation' as wind turbine industry faces challenges

An international wind turbine company's struggles — and overall headwinds the onshore wind industry is facing — are having an impact on south-central Kansas.

On Friday, Siemens Gamesa announced its nacelle assembly facility in Hutchison and its blade manufacturing plant in Fort Madison, Iowa, will be put into "temporary hibernation" in July and June, respectively, due to what the company called "production demand" issues in the U.S. onshore market.

Ninety-two employees in Hutchinson and 171 in Forth Madison are being laid off.

“The hibernation of our manufacturing and assembly facilities is an unfortunate but necessary measure to address the current challenges in the U.S. onshore wind market,” said Shannon Sturgil, the company's CEO of Onshore North America, in a news release. “We continue to pursue new orders and remain fully committed to finding a path in support of our Fort Madison and Hutchinson manufacturing facilities.”

The company had previously announced a round of layoffs in February.

Siemens Gamesa said it remains committed to the U.S. wind market and that delivery on current onshore contracts will not be impacted.

“The hibernation of the two facilities in no way reflects the excellent work done by the teams at those locations," Sturgil said. "We explored many options to address the current shortfall, and ultimately found the hibernation plan to be the most viable option for the long-term success of our manufacturing and assembly plants in the United States.”

The company added that the U.S. onshore wind market "has slowed in anticipation of new climate legislation and the accompanying renewable energy incentives."

The move comes as Siemens Energy has launched a $4.28 billion bid for minority holdings in Siemens Gamesa, as the wind turbine manufacturer has struggled due to a 2021 patent fight (which it eventually won) and supply chain and inflation issues exacerbated by Russia's invasion of Ukraine. Siemens Energy already owns a 67% stake in the company after a spin-off from former parent Siemens.

Metals prices, in particular, have jumped, impacting bottom lines for the industry.

Reuters reported Monday that Siemens Energy CEO Christian Bruch said turning around Siemens Gamesa could take "multiple years."

Siemens Gamesa's shares had fallen 20% since the start of the year prior to the offer being made, and it had issued three profit warnings in less than a year.

"There are not yet clear signs of a near-term recovery in the current setup," Bruch told reporters.