The nearly 500 workers at LM Wind Power's wind-blade manufacturing plant in Little Rock will lose their jobs as the company closes its operations because of declining demand for the giant blades it produces, the company said Tuesday.
Manufacturing will cease at the end of April, with 370 job losses occurring then, while about 100 employees will be asked to remain on-site until the plant is fully closed by the end of the year, a spokesman said.
Employees will be paid salaries for at least four months and will have their insurance premiums paid for six months, the company said.
The financial crisis brought on by the coronavirus pandemic had nothing to do with the decision, LM Wind Power said.
"We understand that this is a difficult time to announce this decision and are taking a number of steps to provide additional support for our employees during this time," the company said, citing the continued payment of salaries and insurance premiums.
The closing of LM largely brings an end to the highly touted but little realized blossoming of the wind industry in Arkansas.
"There are no other large manufacturing companies in Arkansas for the wind industry," a spokesman for the Arkansas Economic Development Commission said Tuesday. "It's been a volatile industry for many years now, due to the changing commitments at the federal level for the production tax credits."
The LM workers in Little Rock produced 144.6-foot and 204-foot blades for industrial wind farms.
"We've seen declining demands for both blades but especially a significant drop in demand for the shorter blades," the spokesman said. "The broader trend in renewable energy is toward even larger blades [more than 200 feet] because they're more powerful and more efficient."
LM's plant in Grand Forks, N.D., will continue production, according to the company.
The Little Rock plant opened amid much fanfare in 2008 as LM Glasfiber, then owned by a company in Denmark. Its $150 million investment would produce some 1,100 to 1,400 jobs over five years, the company said. State and city officials said it was the city's largest industrial development investment at the time.
The administration of Gov. Mike Beebe attracted LM Glasfiber to Little Rock with a round of financial incentives that included $6.9 million from the Governor's Quick Action Closing Fund and more than $8 million in "economic infrastructure fund" grants from the Arkansas Economic Development Commission. The commission also gave the company $3,500 per worker for training.
The General Assembly in 2007 also passed legislation giving the company a 27-year exemption from the state corporate income tax.
By October 2008, the company had 630 employees at its temporary quarters on Interstate 30 in southwest Little Rock, about 130 more employees than it expected to have at the time, company officials said.
LM Glasfiber was renamed LM Wind Power in 2010 and was bought by GE Renewable Energy in 2016.
The recession of 2008-09 bought two rounds of layoffs, in March and June of 2009, totaling 230 job losses to a workforce of about 500. Those job cuts were brought on by a tight economy and tougher access to financing.
Still, the company remained optimistic. "The thing that we'd like Little Rock and Arkansas to understand is that we're here to stay," a company vice president said at the time.
In 2013, amid questions about whether Congress would retain federal tax credits crucial to the wind-power industry, LM Wind Power and similar companies had setbacks.
Neither LM Wind Power, nor its predecessor was able to reach the employment thresholds set by the state for the incentives. The company repaid the state $3.4 million in 2014.
The city also gave LM Glasfiber the acreage at the Little Rock Port Authority, a value of $5.4 million.
The city put no restrictions on the deal, Bryan Day, executive director of the Little Rock Port Authority, said Tuesday. "I'm going to suggest or say that the land belongs to them [LM]," he said. "The city didn't have any provisions on the land."
Day wasn't director of the port at the time.
The port typically doesn't give land away but did so in this case to complement the state's incentives package, he said. "We might do it differently now [but] it's water under the bridge. It's just a tough time for everybody."
The port authority didn't know of the company's plans to close until LM's announcement Tuesday morning, Day said.
"We're obviously disappointed," he said. "LM has been an amazing partner with the port and community since 2008. It bought great-paying jobs and was a leader in the renewable energy sector. We're going to hate to see them go."
Day said the authority is prepared to work with LM Wind Power in finding a tenant or buyer for the 125-acre property. "I'm sure they're focused now on taking care of their employees, but we'll be ready to help when they are ready," he said.
The site consists of the main manufacturing facility of more than 100,000 square feet, several support buildings and parking for hundreds of employees, Day said.
Day noted Little Rock's confirmation last week that Amazon is building now on an 80-acre site at the Port of Little Rock. Details on the size of the project haven't been released by the tech giant. The city's announcement followed a vote by the board of directors to approve a resolution authorizing the port to sell the land for $3.2 million to a limited liability entity linked to Amazon.
"Based on existing buildings and utilities, this will be the largest parcel immediately available," Day said. "We're optimistic we can get another great industry in there. I am sad for LM, I am sad for their employees, but it's just part of the economic development game."
The arrival in Little Rock of the blade manufacturer -- and the lure of the federal tax credits -- sparked a flurry of announcements of similar companies coming to Arkansas. None of those developed.
Nordex USA Inc. announced a $100 million project in Jonesboro in 2008 that would create some 700 jobs. It halted production at the wind-turbine facility in 2013 and laid off about 40 employees. Nordex returned some $2.5 million to the state and to Jonesboro for grants.
In Osceola in 2010, German-based Beckmann Volmer said it would invest $10 million in a manufacturing plant that would employ about 300 people in five years to build steel parts for the wind turbines being built in Jonesboro. The company went bankrupt in 2014.
In 2009, Netherlands-based Polymarin Composites delayed -- and eventually discarded -- a project on Interstate 530 near Wrightsville that would have had more than 800 employees.
A Mitsubishi project in Fort Smith also never panned out. Mitsubishi Power Systems Americas Inc. in October 2010 said it would relocate a wind turbine assembly plant to Fort Smith from Japan. Company officials had said the proposed $100 million plant would be operational by 2012. The facility was built but never occupied by Mitsubishi.
A Section on 04/15/2020