Vestas cuts jobs as share value falls
The world's largest wind turbine manufacturer Vestas has reported losses and plans to close a number of its Scandinavian factories.
In its financial report published October 26 the company reported a 5% drop on third-quarter revenue for the same period last year (Euro 1814 million). Vestas has blamed the current tight financial environment for slow demand.
The company says it will cut jobs by around 3,000 and close four plants in Denmark, where costs are highest, and one in Sweden. Cuts in administrative posts are also expected at Vestas Randers headquarters.
The latest round of cuts will cost an estimated €150 million, said Ditlev Engel, Vestas president and chief executive at a press conference.
To further add to the pain, shares fell for a fifth day in Copenhagen trading after rival Siemens AG won a an order with Enel Green Power to deliver machines for new European contracts.
Vestas' chief executive, Ditlev Engel said that the company is now looking to shift European manufacture to Spain, where is it cheaper to build wind turbines.
Last year the company controversially shut a turbine manufacturing site on the Isle of Wight in the UK amid protests from workers. The closures were blamed on lack of demand in northern Europe and problems with planning permission. The US offered a competitive alternative site for manufacturing where expansion has created around 3,000 jobs, a similar number to the losses now expected in Denmark.
Against this backdrop, the UK government has promised new financial support for the offshore wind manufacturing sector.
At the CBI annual conference on Monday (October 25) Prime Minister David Cameron pledged support for wind power. He said: "We need thousands of offshore turbines in the next decade and beyond - each one as tall as the Gherkin.
"And manufacturing these needs large factories which have to be on the coast. Yet neither the factories nor these large port sites currently exist. So we're stepping in.
"To help secure private sector investment in this technology, we're providing up to £60 million to meet the needs of offshore wind infrastructure at our ports." Alison Brown