DENVER (AP) – Proposed job cuts by wind-turbine maker Vestas are expected to have little immediate impact in Colorado, where the governor and economic development groups made it a showcase for the state’s “New Energy Economy” focusing on renewable energy products.
However, Vestas warned that could change if Congress fails to extend federal tax credits for renewable energy, putting another 1,600 U.S. jobs at risk. There was no estimate available on the number of Vestas jobs that could be affected in Colorado.
The company announced Thursday it will lay off about 2,300 employees, mainly in Denmark, because of a market downturn caused by the financial crisis. That includes 1,300 employees in Denmark; 450 in Spain, Italy, Germany and Sweden, 400 in China and 182 in the United States.
Last year, Vestas laid off 3,000 workers after posting a 24 percent drop in profits in the third quarter.
The company is preparing for further cuts if the U.S. doesn’t extend its Production Tax Credit for renewable energy, which expires at the end of 2012. In 2010, Vestas was awarded about $51 million in federal tax credits in the U.S.
Vestas has invested more than $1 billion total in Colorado. One Brighton plant assembles nacelles, which house the turbine, and another builds 180-foot-long blades. A plant in Pueblo builds towers for the turbines and a plant in Windsor manufactures 144-foot and 161-foot blades. In 2010, Vestas said it had created more than 1,000 new jobs in Colorado.
Andrew Longeteig, spokesman for Vestas American Wind Technology, Inc., pointed to a strong 2012 in the U.S. and Canada thanks to wind turbine sales. The company plans about 20 installation projects this year, Longeteig said in a statement.
Denise Bode, chief executive of the American Wind Energy Association, said Vestas’ announcement shows the danger to U.S. manufacturing jobs if Congress doesn’t extend the renewable energy tax credit. Manufacturers such as Vestas have invested billions of dollars in the U.S. economy, she said.
Renewal of the tax credit “needs to be first on the list of priorities to be included when Congress gets back to work again in a few weeks,” Bode said.
Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, said the U.S. needs a stable, long-term tax policy that allows companies to plan over multiple years.
“Unfortunately, the type of short-term extensions Congress is prone to passing puts American jobs in jeopardy,” Bingaman said.
Both of Colorado’s senators, also Democrats, have been fighting to extend the credit.
Sen. Mark Udall said a small up-front investment would have a big benefit in Colorado, while Sen. Michael Bennet’s staff said the credit has spurred private investment, job growth and U.S. technological innovation.
In 2008, Colorado state and local government entities provided $2.2 million in incentives to attract the $95 million Vestas Blades plant in Windsor, according to KMGH-TV. The state contributed $928,000 – or about $2,000 for each new job created – and local government and private entities provided another $1.3 million.
Former Gov. Bill Ritter signed more than 60 pieces of clean-energy legislation, including laws requiring utilities to get 30 percent of their power from renewable sources by 2020. Utilities say they have to rely heavily on wind power to reach that goal.
Ritter said his new energy economy programs created “tens of thousands” of new jobs, though no one can say exactly how many. Studies vary widely, from 20,000 to 90,000 over the next decade.
By Steven K. Paulson, Associated Press
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