With no new orders expected for Aberdeen, Molded Fiber Glass announces plant closureDecember 7, 2017 11:47pm

Dec. 06--When General Electric decided to stop ordering wind turbine blades from Molded Fiber Glass, the future of the Aberdeen plant grew dim.

That's because GE is the plant's sole client.

"Our customer had no requirements for additional blades from our operation beyond January of 2018," said said Dave Giovannini, senior vice president, in an email to the American News.

That's why Molded Fiber Glass announced Wednesday morning that it is closing its Aberdeen facility, which opened in 2008.

The move will leave 409 people out of work. It's expected the plant will be closed by Feb. 15, 2018, said Camille Cox, communications representative for the plant.

As the final orders are fulfilled, she said, employees will start being laid off.

That process will begin no later that Feb. 1, though a timeline has not otherwise been set, Giovannini said in the email.

Employees were informed of the closure at a mandatory meeting at 6 a.m. Wednesday. A notice about the meeting was posted Tuesday, said Molded Fiber Glass employee Russ Sukut. After the meeting, employees were given the option of taking the rest of the day off with pay, he said.

Nobody is immediately out of work, Cox said. Those who handle the blades early in the process will be the first to finish their work.

"If you're sweeping the floor, you'd be the last one," Cox said.

She did not know whether severance packages would be offered for employees. And Giovannini did not respond to questions asking about severance and his future plans.

A few Molded Fiber Glass workers will move to other sites within the company, but that number is very small, Cox said.

"MFG does not have any other facilities in the immediate area and the skill set (in Aberdeen) is very specific," she said.

Based in Ohio, the company also operates in Alabama, California, Kansas, North Carolina, Ohio, Oregon, Pennsylvania and Texas, as well as having one site in Mexico.

Work on Aberdeen's Molded Fiber Glass building started on the northeast edge of town in 2007. The 340,000-square-foot-building is owned by the Aberdeen Development Corp., said the group's CEO Michael Bockorny.

The Aberdeen Development Corp. built the $21 million plant that was leased by Molded Fiber Glass, according to American News archives. That total does not include the cost of land.

The plant makes blades that are 56.9 meters -- nearly 187 feet -- long. The length of the blades has changed throughout the plant's history.

It's the plant's specificity poses issues, Cox said.

Because Molded Fiber Glass works with GE exclusively, the plant is set up to make only those particular blades, which means it's not very flexible, she said.

Cox said Molded Fiber Glass did all it could to get another business in the building, including attempting to find another buyer. She called the closure announcement "heartbreaking."

A letter given to employees references that effort. It also notes that market conditions and tax policy revisions are reasons for the closure.

"Over the last few months, MFG has been actively looking for new customers or a company interested in purchasing the operation. Unfortunately, we have (not) been able to identify any immediate operations," the letter reads.

The layoffs are the result of changes in the wind energy industry and the plans of GE, Cox said. GE has acquired its own blade manufacturing plant, LM Wind Power in Denmark, which has something to do with the Aberdeen closure, she said.

GE announced it planed to buy LM Wind Power for $1.65 billion in October 2016. The deal was finalized in April, according to Business Wire.

On its website, GE noted that in-sourcing wind turbine manufacturing will improve its "ability to increase energy output while reducing the cost of electricity" thus creating value for its customers.

Cox also noted that the renewable electricity production tax credit -- a benefit Molded Fiber Glass has relied on -- is expiring. It has been "driving capital investment," she said.

The credit is given to companies that manufacture wind energy. But, she said, it has been a vital to investments those companies make in wind turbines, especially the large ones made at Molded Fiber Glass, Cox said.

It started being phased out, at 20 percent annually, this year, according to information from the U.S. Department of Energy.

Lobbyists have been working hard to find a replacement for the credit, but Cox said finding one seems unlikely.

The phase-out was approved with support from the wind industry in 2015, said Evan Vaughan, national spokesman for the American Wind Energy Association. However, he said, recent amendments to the Tax Cuts and Jobs Act affect the usability of production tax credit while it remains.

Mayor Mike Levsen said he was aware the Molded Fiber Glass announcement was coming, and although he's not an expert in the industry, he points to the tax bill as a reason.

"It's apparent that the new tax bill will cause some economic disruption and this is one of them. It's what happens when government policies turn against industries. It discourages investment," Levsen said. "From what we've been told, the changes are leading to cancellations of wind energy projects."

"If there was anything I could have done to stop it, I would have," Bockorny said of the closure. "MFG has made every effort to stop it."

He said there's never a good time for a company to announce layoffs, but the outlook for Aberdeen remains strong as there are three companies that are serious about coming to town.

"I understand, for the 409 affected by this, it's tough. It's not an easy thing to digest, but hopefully the majority of them will find employment," Bockorny said.

Bill McEntaffer, director of field operations for the South Dakota Department of Labor, isn't so sure those jobs will be local, though.

"Within Aberdeen, unfortunately there aren't 400 jobs that are necessarily going to be there," he said.

Molded Fiber Glass is planning events to help workers as operations wrap up.

"Over the next few weeks, meetings will be held in conjunction with the South Dakota Department of Labor and Regulation to help our teammates complete paperwork necessary for unemployment benefits and help with creating resumes," the letter to employees reads. "Additionally, we are working with the Department of Labor and Regulation to hold a local job fair to aide our teammates in identifying, applying for, and possibly interviewing for new jobs."

Levsen said he hopes Molded Fiber Glass employees are successful in finding new jobs locally.

"MFG has been a valuable part of our employer base here," he said. "Actually, a valuable part of the national clean energy industry."

Reporters Elisa Sand and Kelda J.L. Pharris contributed to this report.

Follow @vlusk_AAN, ElisaSand_AAN and @Kelda_AAN on Twitter.

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(c)2017 American News (Aberdeen, S.D.)

Visit the American News (Aberdeen, S.D.) at www.aberdeennews.com

Distributed by Tribune Content Agency, LLC.

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