Are Vestas Leaving The Isle of Wight? UPDATE 8

Problems are afoot at the Ryde and Newport sites of Vestas this morning as staff are told to go home.

Vestas Get Expansion Planning PermissionVestas, the wind turbine blade manufacturers who employ a large number of Island residents within their Newport and Ryde sites appears to be questioning their commitment to the Island.

We’ve received reports from VB readers (unconfirmed by Vestas, as yet) that staff were called to a meeting at 7am this morning to be told that there was 90 day consultation starting today and that they may lose their jobs following this period.

UPDATE 1: The closure of the plant appears to be confirmed by new in the Wall Street Journal which says Vestas “was cutting 1,900 jobs in production units in Europe, mainly in Denmark and the U.K., while it continues to expand operations in the U.S. and China.” (Thanks for the update Simon Lilly)

VB Reader Jillian contacted us and told us that she had overheard workers walking away from the Newport site saying, “all I have to do is clock in and out for the next 3 months.”

It’s not clear whether it is the R&D division or manufacturing division that will be affected and the story is developing rapidly, so we’ll bring you updates as we get them.

UPDATE 2: The County Press is reporting that “it is understood the new multi-million-pound research and development building on the West Medina Mills site at Stag Lane, Newport, will still go ahead.”

We were only reading a couple of days ago that Vestas are quoted as being the number one wind turbine company in the world.

New share issue
UPDATE 3: Today Vestas announced that they were offering 18,500,000 new shares for private placement.

This would represent an additional 9.99 per cent of share captial.

They report the additional funds would be used “to further strengthen Vestas’ capital resources, especially to position Vestas to quickly and efficiently exploit the opportunities offered by the credit crisis in a technology based industry.”

Banks a problem
UPDATE 4: Interviewed in New York on the Forbes Video Network, Ditlev Engel Vesta’s CEO said the major problem with the continued growth of their company could be put done down to one thing – The Banks.

He said the demand for wind power solutions was there, but the banks are not funding the purchases.

Infact, due to the credit crisis, “some of the banks that were previously key players in the wind turbine market are no longer active.”

UPDATE 5:
Pressure on the UK Government
In their results, published this morning, Vesta, first quarter net profits are up 70% on sales.

More importantly for the Island, they also say “Capacity will be reduced in Northern Europe, as demand in this area at the moment does not meet expectations.”

Placing the ball squarely in the court of the UK Government, they also say “The British Government’s commitment of 21 April 2009 regarding massive investments in wind power and higher tariffs, will have a positive influence on Vestas’ possibilities of producing blades in Great Britain.” – Translated: If the goverment order wind turbines, we won’t shut down the manufacturing on the Island.

Vestas said capacity will be increased in the USA and China, “owing to the positive market prospects.”

Supply and demand
According to the financial report released today, Vestas’ need for buffer stocks has been reduced and blades will be produced on a supply and demand basis.

The report also mentioned that when looking at the most important risk factors, these included amongst other things, potential patent disputes. With 35 competitors launching in China in the last year, we can see the potential for serious competition.

Number of jobs to go
UPDATE 6: The financial report claims that 1,900 employees will lose their jobs in Northern Europe.

In Denmark alone, the company have stated that they expect to lay off a total of 1,275 employees – going by our maths, that leaves 625 jobs going from elsewhere.

It’s understood that Vestas employs around 500 staff on the Isle of Wight, so some job loses may also occur at the Woolston plant which according to the Southern Daily Echo, employs 200 people.

Share price rises
UPDATE 7:
Reuters are reporting a share price rise of 4.1 percent to 342.50 Danish crowns this morning after the announcement of stronger quarterly earnings than expected and news of the planned share issue.

“The Q1 result was much better than the market had anticipated, as many were waiting for a profit warning. On the other hand it`s a surprise they`re issuing new shares”, says Mads Zink, head of sales trading at Danske Bank.

Nimbyism partly responsible?
UPDATE 8: Ditlev Engel told the Guardian today that as well as the other factors highlighted already in our article, one of the major problems lay in planning applications.

“It is extremely time consuming and extremely complicated. Some of our developers, customers, will tell you it is so difficult. In the UK nimbyism is a huge challenge. ”

New planning permission
Vestas recently received planning permission to expand their Newport Wind Turbine industrial unit. It was hoped that this could lead to the creations of an additional 200 jobs.

The news was broken exclusively by Michael Coombes on Isle of Wight Radio at 8am this morning. Well done to them.

More news as we get it.

Tuesday, 28th April, 2009 9:40am

By

ShortURL: http://wig.ht/26cb

Filed under: Business, Central Wight

Any views or opinions presented in the comments below must comply with the Commenting 'House Rules' and are solely those of the author and do not represent those of OnTheWight.

Leave your Reply

24 Comments on "Are Vestas Leaving The Isle of Wight? UPDATE 8"

newest oldest most voted
Brett

I’m afraid reading the Vestas Financial Report it pretty much confirms the grim news, very sad day!

Looks like that they are keeping R&D on here and going ahead with the new planned development however.

Michael B

Wow, what a blow for the Island – I know quite a few people who have worked there over the years.

Eric K

Hard to understand how they make so much money then shut up shop here.

jono_not_bono
This is proper sh*t isn’t it…and to think I’ve been having trouble looking for a job doing nothing that my degree is in. Haha…I’ve have one question right…. (Me being silly but….. What happens when everyone loses their jobs….Yeah everyone in the country, not just from Vestas). Does that mean my debt gets wiped and things all go back to zero…That is, after a lot of choas… Read more »
Simon Perry

The idea of zeroing debt is an interested one – as is leveling property ownership, with no one being able to own more than one house. Those that rent houses (most likely owned by someone with more than one house), would gain it. Workable?

Ben W

Why not?

oh, of course, er we need to get the debt going again to bail out the banks…

Kerry Brown

People will lose their jobs unless Vestas get some money from the government. Talk about holding the government to ransom!

Wendy V

Bad news. I wonder if this has any implication for the Cheverton Down wind turbine planning app (which is jointly Cornwall Light and Power, and Vestas)?

Brian

It’s very sad news indeed but can we really blame Vestas?

They provided employment, making an innovative and world class product.

We, on the other hand, on NIMBY island choose not to support their efforts….

Hardly surprising they want to move on is it?

I can hear the cheers from THWART already….

Lowtherville Lout

NIMBYism… the unbelievable short sightedness of those who campaign against turbines has now driven a nail into the island’s economy.

Maggie

This is shocking news for all who work there and there familys.

Rodders
I guess the bubble had to burst in the current economic climate, cant really blame THWART for what is a global decision based on a number of factors, however the Nibyism in this country certainly wouldnt of helped the short term demand for the blades. It will obviously also have a knock on effect to the suppliers to Vesta’s. A shot of realism has eventually hit our… Read more »
Simon Perry

The shock waves for this will be considerable. I’m sad to say that I suspect it will hit the psyche of the Island hard.

A1
I think that after reading all the comments, I felt that I needed to say something. There are approximately 600 jobs directly at stake when Vestas closes it’s doors, they are currently split between 3 sites – Woolston, Newport and East Cowes. It has pretty much been confirmed that the factory will close within the next 90 days, the negotiations are just starting. It is unfortunate thet… Read more »
watchdog

I think Lowtherville Lout is engaged in some self-delusion if he thinks that the sale of blades for 3 turbines matters a jot in the global business of Vestas. This company makes its business decisions on the basis of what the international banks do, not what a few people in West Wight say.

N0.5

So they can move their base somewhere they don’t have to pay the ferry companies and whose local population appreciate the industry and the jobs.

Why would they want to stay on the Island that offers them no support, moral or financial.

Good luck to them in their future endevours, I hope they get a based in a community that appreciates them

Vestas have excellent transportation routes on the Isle of Wight. Blades go by barge directly to Southampton docks for export. Where is the “paying the ferry company” The local population appreciate all employment on the Island. But to allow a company to turn the Island into a showroom for industrial structures is unacceptable. Vestas business is dependant on government(tax payers) money. Direct grants for production set up… Read more »
Stewart Blackmore

You couldn’t be more wrong, Watchdog. Just read the comments that the Vestas CEO made today, He reserved his fiercest criticism for “local politicians and nimbys who were holding up projects, particularly onshore, giving Britain one of the lenghtiest planning processes for windfarms anywhere in the world.”
This is nothing to do with the banks; Vestas are a successful cash rich company.

Simon Perry

I was in on the Vestas press conference yesterday and you’re both right and wrong.

Correct – Vestas CEO spoke about the problems with the planning process.

Incorrect – He spoke about problems with the banks holding up financing of their clients projects. He also spoke of this in this recent interview we found of him.

playdough

Even if you are not an employee or a dependant of a Vestas employee I would imagine that the knock on effects of such a large redundancy manoeuvre will effect the Island as a whole. The Island is an isolated economy and Vestas would have bolstered other industries on the Island…first comes to mind is Gurit. Then the trickle down effect will begin.

Wendy V

True, I’ve already noticed the ripples, via friends who I had no idea had any connection to Vestas (eg independent businesses that supplied components; even my pilates teacher, who’s immediately lost two clients who work there now that they know their own jobs will go).

adrian nicholas
devastating to Island people and throws a spanner in the green collar economy as employment provider, however,that China and US and the still-unregulated global financial system cannot really claim green credentials, When the abillity to upreach and resource cheaper costs and labour from a narrow non-regenerative butdestructive basis shows that international application of human tight ethics and actual worker stabillity is realsustainable development hoeever unattractive to ‘greed… Read more »
Chris Welsford
The main culprit in my view is National Government. Local Authorities and local politicians will understandably be caught up in the local focus which is more likely to be on issues such as the landscape, noise and light pollution and the views of local residents (hopefully)and NIMBYism is sadly almost inevitable. Without any real commitment from National Government to identify sensible and acceptable sites for wind farms… Read more »