The mass layoff of half its Pipestone workforce that Suzlon Rotor Corporation announced Friday, June 5, won’t be enacted until August, with all 160 employees gone by fall.
The company expects to eliminate 70 of the positions by August 2, with 90 eliminated between August 30 and September 12 according to June 4 notification the company sent to the city of Pipestone.
The cuts are expected to be permanent, according to the notification.
Suzlon cited the downturn in the economy as reasons for cutting its 324 employees in half at its Pipestone plant, where it manufactures wind turbine blades.
The company opened for business in 2006. In return for job creation and economic development, the city had overhauled the industrial park within which Suzlon constructed its plant and gifted the wind component manufacturer with free land and state and local tax incentives.
“Obviously, we’re disappointed,” said Jeff Jones, city administrator.
For example, Suzlon does not have to pay property taxes on its building and improvements until 2015.
Mick Myers, executive director of the Pipestone Chamber and Visitors Bureau, said the news of the layoffs came with, “a smack in the face.
“But we have to deal with it,” Myers said. “We have an awful lot of people who aren’t going to be getting a check and everyone will feel that, from grocery stores to restaurants to gas stations. On the bright side, Ellison (Meat Co.) is hiring people who have a good fit with their industry.”
The 18-unit Prairie Winds Apartment building near downtown Pipestone was constructed by the Pipestone Economic Development Authority in response to a dearth of workforce housing recognized by a 2006 housing study.
“The project was based on the housing survey with Suzlon and Bayliner in full operation,” Jones said. “We couldn’t have picked a worse time to open an apartment building.”
The apartment building opened for occupancy on April 1. To date, two units have been rented.
About 263 employees lost their jobs after U.S. Marine/Bayliner announced its plant closing last fall. The company’s building now stands vacant on the market for $2.5 million.
Suzlon sent the Pipestone County Star an official notice of the layoffs via its Chicago public relations firm, but has not returned direct phone calls made to officials at the Pipestone plant.
Suzlon's official confirmation of the layoffs:
“Suzlon’s employees are the lifeblood of everything we do, and we have the upmost respect for their hard work and efforts they dedicate to our business each day. Yet, like so many other companies that have made difficult decisions because of global economic challenges, Suzlon Rotor Corporation regretfully announces a reduction in workforce at our Pipestone, Minn., facility.
For the wind industry in the U.S. and globally, the past two to three years have been marked by record growth where demand outpaced supply. Suzlon Rotor Corporation, like other wind energy companies in the U.S., increased its manufacturing capacity to meet the needs of the marketplace. However, the current global economic downturn has brought about a more challenging environment for the wind energy sector. The situation could be more accentuated in the U.S., which is the epicenter of banking crisis.
At this juncture, the first priority for any organization worldwide is to consolidate operations to ensure that it becomes self-sufficient, continues to honor its commitment to its customers and stakeholders and starts building resilience.
We have prioritized production plans based on scale economies, cost of production, tax benefits and, of course, commitment to society and employees. Considering all these factors, the company has been forced to make the difficult decision to move forward with layoffs at Suzlon Rotor Corporation in Pipestone.
These reductions are necessary to remain an employer in the Pipestone community and to ensure the long-term success and competitiveness of our company.”
Laid-off Suzlon Rotor Corporation employees will be considered first for available jobs should we commence hiring in the future. Suzlon is optimistic that the wind energy industry will be one of the first to emerge when the economy improves.”
