Bloomberg News

Gamesa Expects to Recall Furloughed Workers by Year-End

July 05, 2012

Gamesa Corp. Tecnologica SA (GAM), Spain’s largest wind-turbine company, expects to recall by the end of this year some furloughed workers from two Pennsylvania factories as orders from South America offset lower demand in the U.S., where a tax credit is due to expire Dec. 31.

The company gave 165 workers 60 days notice of the impending furlough this week and expects to recall a portion of them after about 10 weeks, David Rosenberg, a spokesman for Zamudio, Spain-based Gamesa, said today in an interview.

Gamesa expects Congress to renew the Production Tax Credit after the November election. Wind farms take years to plan and build, and developers are trimming orders now. Total 2013 installations may fall to 4.9 gigawatts from an estimated 10.5 gigawatts this year if the credit is renewed this year after the election, according to Bloomberg New Energy Finance. That’s prompted Gamesa to cut its workforce, Rosenberg said.

“The lack of a PTC is the cause for this action,” he said. “We are dealing with an industry issue, not a Gamesa issue.”

The furloughed workers will continue to receive benefits and other aid, he said. Gamesa plans to recall some when it begins production to meet a 50-megawatt order from Uruguay. Rosenberg wouldn’t say how many people will be recalled.

Some developers are already eliminating jobs. Vestas Wind Systems A/S (VWS), the biggest turbine maker, said in February it will fire about 1,600 U.S. workers if the tax credit isn’t renewed. “We see this hurting everybody,” Rosenberg said.

The Production Tax Credit provides wind-farm owners a 2.2- cent-a-kilowatt-hour tax credit for electricity produced. Gamesa expects it to be extended for two years, Rosenburg said. “We see a lot of bipartisan support in Congress for the PTC.”

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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