The supply problems that affect the entire industry could not prevent the European Union from opening 2023 with 15 new gigawatts (GW) of installed wind power in its race towards decarbonisation. But this record number of windmill inaugurations has not prevented the turbine manufacturing sector from being entangled in a wave of layoffs in Spain (and Europe), of which the latest victim is the staff of General Electric (GE). . 200 of its workers are hanging by a thread in a negotiation that began at the beginning of the year. Added to this are the 352 layoffs agreed by Siemens Gamesa, in cuts that are not new for the sector either: Nordex closed its Vall d’Uixó (Castellón) plant in March (94 affected after another cut in 2018) and Vestas did the same in León (98 workers) before the expiration of 2021.
The General Electric works council is embroiled in the negotiations of the ERE, although both the management and the representatives of the workers have limited themselves so far to explaining their reasons for and against the reduction of the workforce. For now, the unions have notified the Administration of their intention to hold strikes as a measure of pressure on the US company and they do not lose hope that the impact of the layoffs can be reduced. Or even modify those terminations of contracts for temporary suspensions of employment through the ERTE figure, waiting for the situation to improve. “This is a bump”, says the secretary of the European works council of GE, Manel Santiago, “and it is foolish to fire now and then have to hire again”.
The problem, however, is that the purchase orders for new turbines have only decreased, according to statistics from the European employers’ association for the sector, Wind Europe. They have gone from peaking at the beginning of 2021 to falling significantly 21 months later, mainly due to the disappearance of less powerful rotors, less in demand because they are less profitable when it comes to generating energy.
The great obstacle holding back the sector is another, above all an increase in prices, due to the increase in the cost of raw materials and energy, but also because of transport, which meant that between the order and the final delivery of a project (a year can pass between the end of the entire period) could stop being profitable for manufacturers. “They had to maintain contracts and prices and assume not only the losses due to these increases, but also the compensation they had to face due to delays in deliveries due to logistical complications,” says Juan Virgilio Marqués, CEO of the Wind Power Business Association ( AEE).
Another issue is that, although the installed power has increased, as the turbines are increasingly powerful, the number of wind farms has decreased, and the law of supply and demand indicates that fewer requests and the same competition to sell, customers squeeze with discounts. Added to this is the fact that Chinese manufacturers threaten to take over a piece of the European market, as has happened with photovoltaic panels.
protectionist policies
The president of Parliament, Ursula Von der Leyen, referred to this Asian competition just a week ago, when she pointed out the need to increase aid for a sector that must face “its massive and hidden subsidies for the production of wind turbines, for example , or solar panels”. But the problem is also in the United States, which is boosting aid to its manufacturing industry both with direct aid and with obstacles to imports. The clearest example is the 73% tariffs that mill towers manufactured in Spain have to face.
“If we continue to think that we are going to survive only by having higher quality, we are wrong: we need to be more competitive,” defends Márquez, who puts the regularity of the administrations when implementing their permits to install as the first element of that competitiveness. new parks. “Accelerations and stoppages are bad for the industry,” he explains, in relation to the problem that it generates for manufacturers when large contests are given free rein every few years, but without regularity.
General Electric argues to the unions the need to reduce its workforce in Spain due to a reduction in orders and the fall in prices, but also due to quality problems in projects already delivered. The renewables division already announced a significant cut in its onshore windmill division in the United States last year, and has now followed the same strategy in Europe, where, including in the Spanish case, it intends to lay off more than half thousand people.
Siemens Gamesa’s approach, after large losses in the last two years (940 million in 2022 and 627 million in 2021), is similar. Its management reached an agreement with the unions to dismiss 352 of its 5,100 employees in Spain, but the impact in all the countries in which it operates will reach 2,900 people. The company plans to carry out the adjustment between this year and next year, a long term that can be interpreted as a desire to reduce it if the situation changes, especially in some booming areas, such as renewable energy parks.
Ignacio Serrano, head of the CC OO renewable industry, points out that in each company the problems are different, but he sees a generic one: all companies are adapting their manufacturing operations after corporate operations carried out in recent years. The big question is how long it will take to affect this reduction in employment downstream of the sector, among the 250 production centers that are part of the industrial chain of this segment. According to the latest report from PREPA, there are 8,500 people working in manufacturing centers. “The further down the chain you are, the more you will suffer,” says the CEO of PREPA.
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