Vestas to shutter factories in Germany, Spain and Denmark

Danish wind turbine maker Vestas Wind Systems A/S (CPH:VWS) announced today it will stop production at three European factories, in Germany, Spain and Denmark, to adjust its manufacturing footprint to the needs of its changing product portfolio.

A total of 650 employees will be affected, with the manufacturer saying it will try to relocate them.

“Today’s fast-moving energy transition, rapid introduction of new products and recent integration of our onshore and offshore business require us to further mature and evolve our supply chain network and manufacturing footprint,” explained executive vice president and chief operating officer Tommy Rahbek Nielsen.

Vestas’ factories in Lauchhammer, Germany and Viveiro, Spain will cease production by the end of 2021.

The Lauchhammer site was scaled down two years ago and currently employs about 460 people. It produces blades for the V117 and V136 turbines, future demand for which will be met by Vestas’ other blade factories around the world.

With 115 employees, Vestas’ factory in Viveiro makes generators for the 2-MW onshore platform as well as control panels for the V164 offshore turbine for foreign markets. Its activities have become unsustainable due to reduced demand for the 2-MW platform and the need to optimise offshore manufacturing, the company, which has a global headcount of over 29,000, said.

The Esbjerg plant in Denmark has about 75 employees and manufactures power conversion modules for the V164 and V174 offshore turbines. Vestas said demand for these modules will gradually shift to mainly non-European markets and be provided by more localised manufacturing facilities. Production is set to cease during the first half of 2022.

The cost of the closures will depend on details such as negotiations with work councils and the sale of buildings. It will be recorded as special items related to the integration of the offshore business in the third quarter of 2021. In the 2021 outlook in its most recent report, the company projected special items of EUR 100 million (USD 118m) linked to the integration of MHI Vestas Offshore Wind A/S.

(EUR 1.0 = USD 1.178)

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