Recent market developments have seen a decreasing demand for the 2 MW wind turbine platform in Europe, while the demand for the 4 MW platform in the region can be met by less capacity than currently provided by nacelles factories in Europe and other regions where Vestas recently has established production capacity.
Responding to these market developments and to sustain its competitiveness, Vestas intends to cease production at its assembly factory in León, Spain, affecting all of the factory’s 362 employees. The employees have been informed about the intention to cease production through the local works council and will also receive a letter from Vestas with information on the situation and contact details for further information.
As per Spanish law, Vestas will now initiate negotiations with local works councils for all affected employees. Vestas is exploring opportunities to relocate employees from León to other Vestas manufacturing and service sites in Spain, as well as opportunities outside of Vestas through an outplacement plan. The negotiations are expected to be finalised within 30 days from commencement, as prescribed by Spanish law.
Spain remains a key market to Vestas with more than 4 GW of installed turbines, 6 GW under service and around 2,000 employees as of 30 June 2018. Vestas continues to have a strong local footprint to serve Spanish and international markets, including a generator factory in Viviero and a blades factory in Daimiel where Vestas is investing to set up production of blades for the V150-4.2 MW turbine. Additionally, Vestas also has Service hubs and warehouses, its Mediterranean headquarters in Madrid and a strong local supply chain in Spain.
The financial cost of ceasing production at the assembly factory in Leon will mainly relate to write down of land and buildings. These costs will be booked as special items and will be included in third quarter of 2018.