Wind – The turbine maker, expanding in Portland, says orders need to pick up.
Vestas Wind Systems AS, the world’s leading wind-turbine maker, may reduce jobs if the rate of new orders doesn’t improve in the next 11 weeks, Chief Executive Ditlev Engel said.
Orders from the U.S., the largest wind-turbine market, “came to a standstill” after the collapse of Lehman Brothers Holdings Inc. in September tightened credit for wind-farm developers, Engel said Wednesday in New York after announcing that fourth-quarter profit doubled.
Denmark-based Vestas employs about 350 people at its six Portland locations. In December, the company announced plans for a $250 million office complex that would add about 650 jobs to its North American headquarters in the city.
The slump in U.S. orders left Vestas with a backlog of 5.2 billion euros, or $6.69 billion, about 75 percent of this year’s sales target of 7.2 billion euros, Engel said.
Last year’s backlog accounted for 80 percent of sales, he said. U.S. customers are waiting for the final version of wind-power incentives in the economic stimulus plan that may emerge next week, he said.
President Barack Obama has said he wants to double the production of alternative energy in the next three years. More incentives may follow in a comprehensive energy bill, Engel said.
“The political landscape for our industry has never been better,” Engel said. “The financing and banking climate has never been worse.”
The final stimulus bill probably will extend a federal tax credit for power production by wind turbines that would otherwise expire at year-end and guarantee as much as $90 billion in loans for renewable energy and new power lines needed to reach markets, Christine Tezak, a Washington, D.C.-based analyst for Stanford Group Co., wrote Wednesday in a note to clients.
Engel has resisted pressure to match job cuts this year by LM Glasfiber, the world’s biggest maker of wind-turbine blades, and the wind unit of Siemens AG, saying Vestas needs experienced employees to maintain quality. Reliability is crucial to buyers who expect turbines to run for 20 years, he said.
Vestas will maintain a hiring freeze until sales revive, he said. Staffing rose 36 percent, to 20,829 employees, in 2008.
“The U.S. has the best wind resources in the world,” Engel said. “When the banks do come back into the financing market, they will be looking for low-risk businesses, and wind is very low-risk.”
Fourth-quarter net income doubled to 316 million euros from a year earlier. That beat the 242 million euro median estimate of 11 analysts surveyed by Bloomberg. Sales rose 32 percent, to 2.48 billion euros.
Engel also maintained a 2009 capital spending plan of 1.2 billion euros that includes expanding its first U.S. manufacturing operation, which opened last year in Colorado.
That spending will be scaled back unless orders pick up, he said. He declined to say which operations or projects may be reduced or delayed.
Also Wednesday, Vestas announced a new, 3-megawatt turbine planned for shipment in 2010. It will be more economical than existing models in areas with low to moderate wind energy because it will be capable of generating power from wind as light as 6.7 mph compared with 11 mph for current designs, Engel said.
“We have no intention of lowering our prices,” he said.
Vestas also won’t attempt to compete with General Electric Co., the largest U.S.-based producer of electrical equipment including wind turbines, in financing wind-turbine projects, he said.
Jim Polson, The Oregonian – http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/1234407318326370.xml&coll=7