Curious timing in Suzlon job cuts
PIPESTONE -- The Suzlon Group reported Saturday a strong orderbook of $5.4 billion and an improving performance. Two days later, Suzlon Rotor Co. in Pipestone announced scaled-back operations that would eliminate 110 positions, effective Dec. 29.
"There are no unions representing the affected employees," regional manager Brad Wiggins wrote in the notice of work reduction to Pipestone City Administrator Jeffrey Jones. "This action is expected to be permanent and no bumping rights exist."
The move, the notice said, was the result of a downturn in the economy.
Suzlon, an India-based company and considered the world's third-largest wind turbine supplier, reported a "markedly improved" financial situation across the board at the end of the quarter, with sales performances on track.
Tulso Tanti, chairman and managing director of the Suzlon Group, stated in the report, "The wind industry has undergone a major transformation over the past two years. While many mature markets face near stagnant conditions -- compounded by policy hurdles -- new and emerging markets are increasingly driving growth for the sector. I am happy to report that we are well positioned in both the emerging and off-shore markets -- our strategy to focus on these markets has proven to be sound and is now beginning to deliver."
But at whose cost did that strategy come?
Jones, who is also the economic development authority director in Pipestone, said the city was aggressive in its efforts to attract Suzlon to the area, acquiring land for the plant location and upgrading their industrial park to accommodate the factory.
Job Opportunity Building Zone (JOBZ) agreements, state grants and city money were all used to make the project happen.
"We worked closely with Suzlon to get them here," Jones stated. "We do have an investment in that factory."
The JOBZ program designation was for more than 80 acres of land, making Suzlon eligible for hundred of thousand of dollars in tax incentives such as no property, sales or state income tax, no corporate franchise tax and a tax credit for high-paying jobs.
More than $250,000 was invested in the land, and $1 million was put into the infrastructure. The land was sold back the Suzlon for $1. In October 2005, Gov. Tim Pawlenty was on hand to scoop a shovelful of dirt at the groundbreaking ceremony.
Then, in June 2009, half of the workforce at Suzlon was laid off, leaving the community shaken. At one time, there was a peak workforce of more than 500 employees. With Monday's notice, the plant will employee about 30 people by Jan. 1, 2011.
"Hopefully they can get back on track," Jones said.
Pipestone, with an estimated population of 9,395 in 2008, is still reeling after U.S. Marine closed its doors in 2008, costing the city approximately 200 jobs.
"For a town our size to lose two major employers like that is very difficult," Jones said. "I understand it is happening nationally, but it is hard to deal with the ramifications of so many people losing their jobs."