The market appears to be turning around for LM Wind Power, one of the leading wind-turbine manufacturers in the world, and its Little Rock operations.
For the second time in less than 12 months, the company is expanding its operations in the Port of Little Rock industrial area with the construction of an $8.3 million “post mold facility” building, according to city documents. Large molds are used to shape the blades used in wind turbines.
The new building will replace a temporary one housing what city officials said they believe is the finishing portion of the manufacturing process.
An announcement on the precise nature of the new construction, what it means for the facility and how many jobs the move will create is forthcoming, said Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce.
“They are working on trying to put together the announcement on that,” he said earlier this week.
Officials at LM Wind Power headquarters in Denmark or at its operations in Little Rock didn’t immediately respond to emails seeking comment.
But local leaders welcomed the development.
“LM is one of the Port’s flagship industrial partners and we have enjoyed watching them grow and expand at the Port of Little Rock over the years,” said Bryan Day, the port’s executive director. “The work they are doing here is truly making a difference and the community should be proud of the impact LM is having on the renewable energy sector.”
LM was acquired by General Electric in a $1.65 billion deal last year. The company remains based in Denmark.
The deal came as LM expanded its operations at the port by combining two plant operations in the city with construction of a 44,000-square-foot warehouse and a total of 525 employees based at its port complex. That move allowed the company to store materials on site instead of at an off-site location on Scott Hamilton Drive and reduce transportation costs.
The wind-power business has battled head winds that have waxed and waned since LM opened its Little Rock operation in 2007. Much of the undulating business the company has experienced revolves around uncertainty regarding the federal production tax credit.
The credit of 2.2 cents per kilowatt hour of renewable power expired in 2012 and then was extended several times since then.
When Congress let the tax credit expire in 2012, LM Wind Power, which had 391 workers at the time, cut 234 jobs in Little Rock. By 2013, the company’s local workforce was 137.
Business started up again for the industry when Congress extended the tax credit and allowed firms to qualify for the incentive if construction began in 2013. That allowed LM Wind Power to add about 400 jobs to its Little Rock facility.
In 2015, Congress extended the production tax credit until 2019, with a phaseout period starting in 2017.
LM never reached the 1,100 workers it expected to employ in Little Rock when it received an incentive package from the state in 2007. As a result, the company repaid the state $3.4 million in 2014 after a review found that the company didn’t meet employment terms of the package.
But Chesshir said the market for wind and other renewable energy will continue, with or without the tax credit.
“From the day we announced that project, obviously the world has changed quite a bit,” he said. “But from the standpoint of what their original plans were and what happened with the worldwide economy that completely obliterated some of the competition and now without the wind tax credits being the primary driver for wind energy, people realize it is usable, it is cheap [but] it has to be a part of a portfolio of power.
“As that has now regained momentum, obviously LM’s business is starting to pick back up, which is why they are now finally getting into what they expected to be really three, four or five years ago. But because of the world economy, it’s just taken longer.”