SMA: Source Wind Towers in the U.S.

Noting that the United States has ample capacity to produce and fabricate wind towers domestically, the Washington, D.C.-based Steel Manufacturers Association is taking exception to a recently announced agreement between the United Steelworkers and two state-supported Chinese wind turbine manufacturers to build a new $1.5 billion wind farm in Texas using parts sourced in unionized U.S. facilities. SMA represents U.S. minimills, which are largely nonunion.

Shenyang Power Group and A-Power Energy Generation Systems have agreed to source major parts and components for the Texas wind farm project, including approximately 50,000 tons of steel for wind towers, from unionized producers and fabricators in the United States. The USW will assist the Chinese companies in establishing a domestic supply chain for the manufacture of wind machines.

The deal allows the Chinese companies to receive federal stimulus funds to complete the Texas wind farm project, even though U.S. manufacturers already possess the capacity needed to service the Texas project. Both Chinese companies are subsidized by or partially owned and controlled by the Chinese government, according to SMA officials.

“The available domestic capacity is due at least in part to imports of low-priced Chinese wind towers, which have forced U.S. manufacturers to idle significant capacity as they lose projects to Chinese competitors,” says SMA President Thomas A. Danjczek.

Several large multinational wind farm constructors have taken business away from U.S. wind tower fabricators in favor of Chinese manufacturers selling steel and steel towers at cut-rate prices. Two high-profile wind farm projects have recently chosen to source from China, undercutting U.S. manufacturers, Danjczek says.

“U.S. steel producers and fabricators are operating at low capacity utilization,” he adds. “We understand the USW’s commitment in favor of unionized facilities, but we would contend that both union and nonunion shops are capable and qualified, and the most competitive company should prevail,” Danjczek says.

“The USW-China deal is helpful in bringing some manufacturing back to the United States in so far as the wind farm components are built in the U.S., but we need to reinvigorate our domestic manufacturing sector for the long-term,” Danjczek says. “Other multinational wind tower projects should follow this lead and buy their towers here in the United States. Any suggestion that U.S. manufacturers are incapable of servicing wind tower projects in the United States is grossly in error,” he adds.

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Monday, July 25, 2016