The almost 900 employees should have their last working day on June 30th, the Handelsblatt learned from corporate circles. Nordex has not yet wanted to comment on this. A second production facility for the production of nacelles for wind turbines, also at the Rostock site, should not be affected by the closures.
“You cannot demand the energy transition but ignore the fact that the energy transition begins with production and material procurement,” says Ralf Meier. He has been Chairman of the Group Works Council of the international wind company for five years. In his eyes, closing the plant in northern Germany is an irreversible step.
It is a decision that seems paradoxical to many in view of Germany’s dependence on Russian gas and the associated call for a faster expansion of renewable energies. Despite the planned energy transition, increasing demand and ambitious climate targets, German wind companies are shedding more and more jobs and are increasingly relocating their production abroad. A total of 60,000 jobs have been lost in the wind industry over the past ten years.
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In the past twelve months alone, the three largest European wind turbine manufacturers Vestas, Siemens Gamesa and Nordex have laid off more than 1,000 employees. With the decision from Rostock, there are now more than 2,000. Even Federal Minister of Economics Robert Habeck, who, according to Handelsblatt information, spoke to Nordex CEO José Luis Blanco a few days ago, was apparently unable to prevent the closure of the plant. Just two weeks ago, Nordex announced that it would be closing a nacelle manufacturing plant in the Spanish region of Valencia.
Nordex’s order books are bulging thanks to the massive increase in demand. In the first six months of last year, the Hamburg-based company collected new projects with a volume of 2.1 gigawatts. Sales rose between January and June to 2.7 billion euros, more than 30 percent than in the previous year. Despite this, Nordex has not made it out of the red for three years.
Hard price war on the world market
Since the system for the construction of wind turbines in more and more countries is being switched from fixed remuneration to open tenders, in which the cheapest bid wins, there is a tough price war worldwide. At the same time, the German market, which is also one of the main sales markets for Nordex, has collapsed sharply in recent years.
Hardly any new wind turbines are built anymore, also because there is considerable resistance from the population. The approval process can now take between three and five years. Domestic world market leaders such as Siemens Gamesa, Nordex and Enercon are posting falling returns despite booming demand.
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In order to save costs, Nordex is relocating production abroad, so the assumption. For example to India: A rotor blade production facility is currently being built there that will produce twice as much as the factory in Rostock. “The order books are well filled overall, but where production takes place is another matter,” says works council chief Meier.
Nordex produces a good 1,500 wind turbines per year. Around half of them come from Rostock – at least for the next three months. Rotor blade production in northern Germany has not been fully utilized for years. That should bring the Hamburgers a double-digit million loss per year. While jobs in Germany and Europe are being cut, several new production facilities are being built in addition to India with locations in Brazil and Mexico.
Savings program at Nordex
“Now we are primarily concentrating on reducing our costs and optimizing the quality of each project,” asserted Nordex CEO Blanco when presenting the figures for 2020. Nordex has been trying to get its numbers under control for years.
The current boss of the Aurich-based wind company Enercon, Jürgen Zeschky, had actually maneuvered Nordex back into the profit zone after the first crisis in 2012. Under his leadership, the Hamburg company concentrated on its core business and decided against entering the production of wind turbines at sea (offshore). Three years after Zeschky’s departure, the turbine manufacturer slipped back into the red and hasn’t come out of it since.
“We have not managed to become as profitable as the Board of Management had hoped for,” says corporate circles. As sales have risen, margins have fallen from 8.4 percent in 2016 to just 3.8 percent last year before the pandemic hit. Now the relocation of productions abroad and the savings in wage and manufacturing costs should help to compensate for the losses, insiders suspect.
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“The group is obviously not succeeding in converting the margins, which are already under pressure at auctions throughout the industry due to the crisis in award prices, into profit through efficient processes and secure supply chains,” believes SPD MP Bengt Bergt, member of the Committee for Climate Protection and energy.
Before moving into the Bundestag at the end of last year, Bergt was also Deputy Chairman of the Nordex Group Works Council. Bergt criticizes that sending such a signal right now, when the expansion of wind power in Germany will be accelerated to an unprecedented extent, is incomprehensible.
On Sunday evening, the first cornerstones of the planned amendment to the Renewable Energy Sources Act (EEG) became known – and they are tough. According to this, green electricity should not have almost completely replaced fossil energies by 2050, as planned, but by 2035. “In this way, Germany is consistently aligning the expansion of renewable energies with the 1.5-degree climate protection path,” says a paper from the Federal Ministry of Economics, from which the “Süddeutsche Zeitung” quotes.
The new law aims for around 100 to 110 gigawatts (GW) of onshore wind power by 2030, doubling the current targets. As agreed in the coalition agreement, wind turbines with an installed capacity of 30 GW should be in operation by 2030.
More: Why the wind power industry is withdrawing more and more from Europe