Vestas to cut jobs and production in the UK

The company blamed weaker demand for turbines in Northern Europe for its decision, but it also said planning delays in the UK market made investing in wind energy in Britain unviable, while expansion of its operations in the US was leading to “structural excess capacity in Northern Europe”.

According to reports in the local press, staff at the Vestas Blades manufacturing plant on the Isle of Wight were told this morning the factory in Newport would be closing and were given 90 days notice.

The news came as Vestas announced first quarter revenue for the company globally had reached  €1.1 billion (£98 million), up 58 per cent on the same period last year.

In a statement, Vestas said despite the rise in the number of turbines and wind power systems shipped – an increase of 21 per cent and 29 per cent, respectively, in the first quarter of 2009 – it no longer believed that the North European markets in the years ahead would be able to absorb the loss of capacity as a result of the company's expansion in the US.

Vestas Blades on the Isle of Wight is the largest manufacturer of blades for wind turbines in the UK. Established in 2000, the plant produces more than 800 blades a year and recently announced it would start making 44-metre long blades at the site. However, the majority of its blades are exported to the US.

It is understood that the lay-offs at the manufacturing arm will not affect Vestas’ UK technology arm headquartered on the Isle of Wight, which is thought to employ around 100. That division is expected to expand with the creation of a £89 million R&D centre that will design and test the world’s longest wind turbines. It is estimated that the R&D centre could create up to 150 new jobs.

At the time of the announcement of the new R&D centre in August of last year, Vestas Technology managing director Rob Sauven, said the site was “a vital part of Vestas’ global R&D programme.”

The South East England Development Agency (SEEDA) said today it was sill working with Vestas Technology on plans for the global R&D facility on the Isle of Wight, which is at planning stage and said it was setting up a "rapid response task force" to support the workforce at Vestas Blades.

“Vestas have welcomed last week’s Budget support for developing wind energy and we will be working with them to determine what opportunities this may create for Vestas Blades to continue manufacturing in the South East – for example modifying production to respond to the Government’s impetus to the UK wind market," said SEEDA chairman Jim Brathwaite.

Last year, Vestas said it was “very committed to the UK market” and expected to employ up to 1,500 people in the UK in 2010, against 1,114 employees.

Despite the job cuts announced today, it said it remained committed to the UK: “The British Government’s commitment of April 21 regarding massive investments in wind power and higher tariffs will have a positive influence on Vestas’ possibilities of producing blades in Great Britain,” it said.

Vestas said that following the lay-offs in Northern Europe, together with its suppliers, it would still have capacity to manufacturer, ship and install 10,000 MW in 2010.