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Nordex Announces Closure of US Wind Power Manufacturing Plant

Nordex SE, a German wind energy company that opened a U.S. manufacturing plant in Jonesboro, Arkansas to great fanfare in 2009, today announced the closure of the plant. The company blames uncertainty in the U.S. market largely due to the last-minute (and only one-year) extension of the wind energy production tax credit (PTC) and the global overcapacity of wind turbines for the decision to close the plant.

“As much as anything, it’s the instability and uncertainty in the market,” said Naomi Lovinger, Head of Communications for Nordex USA. The up-and-down nature of the PTC “makes it impossible to plan,” she added.

In all, about 40 people will be affected, said Lovinger.  She said that the company’s training academy and service operations will remain in operation and that the factory will remain open until about October 2013, while it fills its pipeline orders.  The details are still being worked out, she said, adding that the decision “has been a shock to us all.”

Dr. Jürgen Zeschky, CEO of Nordex SE said in a press release that the company still sees “great potential in the U.S. and Latin American markets” but that Nordex feels it can respond to market conditions with more flexibility by operating out of its one single plant in Rostock, Germany.

Ralf Sigrist, President and CEO of Nordex USA, said in a statement: “This is a sad day for all of us at Nordex USA. We will lose valued colleagues, who have done their very best for us, but the decision was inevitable considering the underutilization of our plant.”

The decision to close the plant marks a sad reversal of hope for the U.S. wind energy market.  When the plant was first announced in 2009, RenewableEnergyWorld.com reported that it planned to employ up to 700 people by 2014.  The nacelle assembly plant cost US $100 million to build, according to previous reports. 

Wind Industry Responds

"Wind power has been good for Arkansas consumers and businesses, and wind power could do a lot more for the state if we had predictable national policies to create a stable business environment," said Rob Gramlich, Senior Vice President for Public Policy of the American Wind Energy Association in reaction to the news. "That starts by keeping the federal Production Tax Credit in place to allow wind energy to scale up as rapidly as it can. Nordex said uncertainty is one of the main reasons for their business decision to cease building wind turbine nacelles in Jonesboro."

Sen. Mark Pryor, D-Arkansas, responded to the news by saying, "I’ve always supported the renewable energy production tax credit. Unfortunately, some in Congress believe we should cut funding for renewable energy. I hope we’ll consider a long-term production tax credit as part of comprehensive tax reform. These companies need more certainty than a one-year extension.” 
 
Sen. John Boozman, R-Arkansas, also commented, "Promising industries like wind turbine production are particularly sensitive to this uncertainty as Washington has been unable to tell them what their tax burden will be beyond a very short term. You can’t make major planning decisions from a business perspective on that timeframe."
 

On the wind energy tax credit, Sen. Boozman added that, "there must be a longer term extension in place so that companies like Nordex and Mitsubishi can grow and put Arkansans to work. I support the credit, have voted for the extensions, and would like to see the wind tax credit authorized for a longer time period to provide certainty to business owners."  

Lead image courtesy Nordex.

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