13 months ago
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LM Glasfiber, a major manufacturer of windmill blades, opened in Little Rock just a few months ago, touting the creation of hundreds of jobs and millions of dollars for Arkansas' economy.
Today, though, things aren't going as planned.
Business is slow, and 150 workers are already losing their jobs
"Orders have slowed our growth in 2009 that we expected even two or three months ago, " says Vice President and General Manager of North American Operations Randy Fox.
Company officials say the national credit crunch is taking a bite out of their business.
Orders for the giant wind blades that power electric generators are down.
Down enough that jobs here in little rock have to be cut.
Fox continues, "We gave our folks a 60 day notice today. What we committed to them is within the next two weeks for sure, potentially by the end of this week, we will get with every white collar and blue collar employee and let them know how and if they are impacted. We know that's the key. At the end of the day the focus here is that we're going to displace 150 people."
Company representatives say the location on Scott Hamilton was initially intended to just be a training facility. But unexpected demand for the product in 2008 led to some manufacturing there. Some jobs from that facility will be transferred to the company's manufacturing plant in the Little Rock port. Other employees who lose their jobs will receive first consideration should the economy turn around and the demand for the product go back up.
Fox says, "Even though the news today is not good, I think a key point here is if we went back a year and a half and said where are we going to be at the beginning on '09, we are still ahead of the pace we thought we would be at. We've invested 95 million dollars to date. We are still fully confident that we are going to meet or exceed the long-term commitments to the state and the local community."
LM is not the only wind power company feeling the effects of the slow economy.
Tuesday DMI Industries in North Dakota announced a 20-percent reduction in their workforce as well.
Company News Release:
LM Glasfiber, the worldıs leading manufacturer of blades for wind turbines, is adjusting its capacity in Little Rock as a result of the credit crunch now causing delays in wind projects due to more difficult financing conditions.
During 2008, the company has expanded rapidly in Little Rock but is now preparing for weaker growth in the short term, and is taking needed steps to assure a strong future for LM Glasfiber in Arkansas.
"We remain strongly committed to our North American operations, including our new regional headquarters in Little Rock," said Randy Fox, Vice President General Manager, North America for LM Glasfiber. "The toughest thing is the immediate impact on some of our employees, who have been instrumental with the launching of Little Rock's operations. These are steps we truly wish we didnıt have to take."
The Scott Hamilton facility will be idled, with approximately 60 of its jobs added to the Port Site to support a planned transition to a 24/7 operation. The total number of reductions in Little Rock is estimated to be over 150, with the company still employing over 350 in Arkansas and more than 1,300 in North America. The transition will begin in approximately 60 days, Fox said.
Fox noted that the company's North American operations grew significantly in 2008. As a result of that growth, the Scott Hamilton facility, which was originally intended to be a training center, was brought online as a production plant to meet growing customer demand. But, due to the credit crunch the company now predicts lower growth rates in the short term. The reduction for volume out of the Arkansas operations does not support the need to maintain Scott Hamilton as a production facility. "The credit crunch is now causing project delays in developer's wind projects due to more difficult financing conditions. As a natural result we must take necessary steps to keep the company on the road to a solid, sustainable future," said Fox. "The long-term outlook for wind is strong and the U.S. is still the worldıs number-one wind energy market. We're confident that the long term demand will rebound, and the difficult decisions being made today will help put us in the best position to ramp back up when it does."
