Wind turbine firm axes staff as recession hits renewables sector

California company cuts 11% of workforce but giant turbine for the North Sea is unaffected
Terry Macalister
guardian.co.uk, Thursday 5 February 2009 14.38 GMT

The windfarm sector faces difficult conditions. Photograph: Christopher Furlong/Getty Images
One of the world's leading turbine manufacturers is to make 11% of its workforce redundant as windfarm developers put on the brakes in the face of a global economic slowdown.
Clipper Windpower said in a trading update that 90 staff would be laid off and production levels cut by up to a fifth but insisted that work on a giant turbine for the North Sea, which is supported by the Crown Estate, would be unaffected.
"Clipper is responding aggressively to the current difficult conditions which impact Clipper, its customers and the entire wind industry," said Doug Pertz, the company's chief executive. "Working closely with customers, we are proactively managing the impacts of this situation and rescaling the business to align with demand."
The renewable energy and clean tech sector has seen its share price hammered over the last six months and green energy developers are finding it difficult to raise money from cash-strapped banks.
In better times, analysts had predicted that Clipper, which is listed on the AIM junior stock market in London, would break even during 2008 but the company admitted today that the losses in the first half would continue into the second.
The California-based group, which once had the former UK energy minister Colin Moynihan on the board and Sir Anthony Hopkins as a shareholder, said it would end the financial year with $214m (£146m) in cash. This was lower than expected as Clipper was hit by deferred customer orders, the need to repair some turbines and late grid connections being installed on site.
Despite these problems, Pertz said the company would be ready when there was an upturn and still expected to install 350 turbines this year, up from 324 during 2008.
Along with competitor Vestas, which reports its financial results later this month, Clipper had been ramping up its production facilities at its main manufacturing base at Cedar Rapids in Iowa in anticipation of new demand.
But the company said it was now "reducing overall operating expenses, component purchases and working capital balances to align with the lower production levels, including an 11% workforce reduction."
It is hoping that the industry will be boosted in the longer term by President Barack Obama's commitment to a greener future in the US.
A London spokesman for Clipper said the research and development of a huge Britannia class turbine at Blyth in north-east England was still proceeding. "Its completely unaffected and the company is still very excited about it," he said.
Clipper, chaired by wind power pioneer Jim Dehlsen, is only producing onshore equipment in the US but sees a great opportunity to develop much larger turbines for Britain and Europe's growing offshore market.
The government's climate change adviser warned yesterday that British ministers might have to support renewable energy developments such as new windfarms as the global credit crisis choked funding for companies.
Lord Adair Turner, who is also chairman of the Financial Services Authority, said there was a drastic shortage of credit to fund schemes which, he says, are crucial to help Britain meet strict targets to cut planet-warming carbon emissions.