Siemens Canada: Closing of 340-job Tillsonburg wind-energy plant should have workers at similar Ontario factories nervous, analyst says
The loss of 340 jobs at a Tillsonburg wind turbine blade plant could be a harbinger of troubles ahead in Ontario’s green energy industry, a leading analyst says.
Siemens Canada said Tuesday it’s closing its Tillsonburg plant, one of four Ontario green energy factories set up under a controversial, multibillion-dollar deal with Korean industrial giant Samsung.
The closing of one of the town’s largest employers came after weeks of speculation, the fallout rippling as far as Windsor, whose mayor was left wondering about the future of a wind turbine tower plant there.
“There is a real risk there,” Mayor Drew Dilkens said of the CS Wind tower plant in Windsor, one of the other factories brought to Ontario under the Samsung deal.
“They have not said anything to me about being on the verge of closing, but we have met with them to see if there is anything more the city can do to help them secure more business and keep jobs in the community.”
Siemens is immediately pink-slipping 206 workers, the rest in phases by January when the plant closes.
Energy analyst Tom Adams said Ontario’s green energy industry could be in for a rough ride if it doesn’t win orders from outside Ontario, arguing the provincial market is saturated with wind and solar electricity brought online since the Liberal government plunged into green energy in 2009.
“I think it was always pretty obvious that whatever jobs were going to arise from the Green Energy Act were all temporary or almost all temporary,” Adams said, referring to the provincial law that paved the way for big wind farms in Ontario under contracts paying energy giants more than consumers pay for power.
“Samsung had no history in renewable energy before they came to Ontario. They came only for the subsidies, and when the subsidies dry up, they’ll disappear as quick as they landed,” said Adams, an independent energy and environmental advisor and researcher.
Demand in eastern Canada has fallen for wind energy equipment, said David Hickey, chief executive of Siemens Wind Power Ltd. But the plant can’t produce larger equipment the industry now wants, he added.
“Ontario and Quebec were the key growth markets before,” he said. “We’re now seeing the market shifting to western Canada, with Alberta and Saskatchewan being the key opportunities of the future.”
Canadian and international markets want the most competitive technology, which means longer blades, he said. “The factory here is constrained. To go beyond the 55-metre blades, we have would require significant investment.”
The plant couldn’t compete with requirements for blades as long as 69 metres for offshore wind turbines.
Competition in the industry has exploded in recent years, Hickey added, driving prices down.
In 2010, four wind and solar energy farm parts plants were set up under a deal between Samsung and the province to generate power for Ontario and create green-energy jobs. At that point, Siemens was producing a 49-metre blade.
In addition to the Tillsonburg and Windsor plants, factories in London and Toronto were set up to make solar power equipment.
Siemens employees were summoned by the company to a Tuesday briefing at a community centre before the jobs axe fell on the town of 16,000.
It’s nothing they didn’t see coming, said some workers.
“Welcome to Southwestern Ontario — here today, gone tomorrow,” Ervin Underhill said of manufacturing in the region. “It’s as unpredictable as the weather.”
With so much power now available, the province has been accused of dumping green energy and has come under fire for electricity prices that have essentially doubled over the last decade.
The government’s about-face on renewable energy projects, halting further large buys, was the beginning of the end, said worker Lee Blair of London.
“We saw the writing on the wall when the Liberals cut the funding to the green energy (projects),” he said.
Though Blair and Underhill said they knew a closing was inevitable, a lockout Sunday — workers arrived to find the plant closed and directions to Tuesday’s meeting — still came as a shock.
“There was quite a bit of anger in there because they shut the place down the other night and never really told anybody,” employee Rick Hunt said. “It was bang, everything was locked down.”
“This was a very difficult decision that was taken only after assessing all the options,” said Hickey.
“We have a great team of employees at the plant who have produced quality work for the last six years, and we sincerely appreciate their efforts.”
Underhill said employees thought they might have more time.
“In January, they told us we were good until 2020,” he said. “They strung us along, more than anything.”
— With Windsor Star file