Siemens Gamesa to close Canadian blade factory, by Karl-Erik Stromsta, Recharge News, 18 July 2017
Renewable Energy on Tuesday confirmed it will lay off hundreds of workers and
close the blade factory it opened six years ago in Tillsonburg, Ontario, citing
the decline of the eastern Canadian wind market and the industry’s shift
towards larger rotor blades.
swirling after Siemens Gamesa reportedly locked workers out of the factory over
On Tuesday the
company confirmed that “regretfully” more than 200 of the plant’s 340 employees
will be let go immediately, with the remaining workforce to be fired in phases
throughout 2017 – and the plant to be closed altogether in early 2018.
The factory is
among the largest employers in Tillsonburg, located roughly halfway between
Toronto and Detroit in Ontario's industrial heartland, and was seen as one of
the most tangible benefits to come from the province's renewables boom earlier
“This was a
very difficult decision that was taken only after assessing all the options,”
says David Hickey, head of Siemens Gamesa’s business in Canada.
“We have a
great team of employees at the plant who have produced quality work for the
last six years, and we sincerely appreciate all their efforts,” Hickey says.
harsh reality is that in order to remain competitive we must constantly
re-evaluate our global manufacturing footprint.”
The outlook for
new wind projects has dimmed considerably in eastern Canada over the past year,
with Ontario scrapping its plans for another large-scale renewables
tender in late 2016 amid a glut of power in the province.
Most of the
blades made in Tillsonburg have remained in Ontario, although the plant has
also sent some output to Quebec and onward to Europe.
As recently as
November 2016, Hickey told Recharge the
Tillsonburg plant was in a “very strong position” in spite of the weak local
market, given its potential to ship blades to emerging wind markets in western
Canada and down into the United States.
Gamesa’s ability to cost-competitively transport large blades to western Canada
was always somewhat doubtful given the logistics and immense distances
involved, and the company has struggled recently to win new wind-turbine orders
in the US – where it already has factories making blades and nacelles in Iowa
noted that its plans to export blades into the US were “delayed due to a
combination of factors, including uncertainty around US tax policy” under
President Donald Trump.
At the height
of Ontario’s wind boom, Siemens was a dominant turbine supplier in the Canadian
wind market. But it has also faced recent headwinds in Canada, falling behind
German compatriots Enercon and Senvion in the Canadian wind market last year.
the plant closure, Siemens Gamesa also cited the industry’s shift towards
larger blades, saying the Tillsonburg factory “cannot easily be adapted to
manufacture this product portfolio”.
significant investments necessary to bring the plant in line with current
market requirements would result in costs that could not be competitive in the
global markets,” the company said in a statement.
The decision to
shutter Tillsonburg comes just three months after Siemens completed the merger
of its wind business with Spain’s Gamesa.
Siemens announced plans for the Tillsonburg blade plant at the beginning of
this decade as part of the controversial multi-billion dollar renewables deal
South Korea's Samsung struck with Ontario.
The Samsung was
given generous off-take deals with the province for big wind and solar projects
in exchange for ensuring that four renewables-related factories were built
locally – with the other three plants backed by SMA Solar, Canadian Solar, and
As it closes
shop for good in Tillsonburg, Siemens Gamesa says it remains “focused on
supporting new wind opportunities in Canada” – like the combined 600MW
procurements underway in Alberta and Saskatchewan – as well as continuing to support existing
customers at the more than 30 wind projects it has supplied to date in the
Much of the
excitement today in the Canadian wind market is centred on Alberta and
Saskatchewan, with many of the supply-chain players in Ontario and Quebec
looking for ways to shift their business westward.
which relied on an overly generous feed-in tariff system in the early years of
its renewables boom, both western provinces have adopted competitive tenders,
which they believe will allow them to build more sustainable markets.