Wind energy could reinvigorate Iowa’s manufacturing sector

The arrival of the wind turbines industry to Iowa provided a lift at a time the state was feeling the loss of some legacy employers and just ahead of the national recession, which eroded some of the state’s manufacturing base.

While new investment in the wind power sector has slowed of late, advocates of the renewable energy and economic development leaders still see potential for more wind turbine manufacturers and suppliers to plant roots in Iowa.

"Wind farm is re-creating and reinvigorating Iowa’s heavy manufacturing," said Harold Prior, executive director and founder of the Iowa Wind Energy Association.

In fact, he said Iowa leads the nation in the number of wind turbines related manufacturers in its borders and in the number of components it produces.

According to the 4-year-old association, Iowa has seen more than $5 billion in capital investment in the past 10 to 15 years – from the development of wind farms to the opening of new manufacturing facilities. "In the last five years we’ve gone from sourcing 25 percent of the components of a wind turbine to sourcing about 60 percent and it’s still growing," Prior added.

A supply chain study by the Environmental Law and Policy Center, conducted a year ago, reported that 80 Iowa companies – including 50 manufacturers – already were engaged in the wind energy industry. But Prior said his association boasts more than 200 members involved in some fashion in the industry who are located in 56 of Iowa’s 99 counties.

Still with 8,000 components in a single wind turbine, Prior said there is more room in the market for new and existing companies to join the supply chain. "From the huge bolts to wiring to control systems and hydraulics, there is such a variety of components that it can attract a wide variety of manufacturers."

Iowa already has been successful in luring more of the major component manufacturers, he said. Those original equipment manufacturers, or OEMs, produce everything from the turbine assembly to the blades, towers, gearbox and nacelles (the structures at the top of the wind turbine towers that house key components of the wind turbine.)

Some of the major companies to land on Iowa soil are Clipper Windpower in Cedar Rapids, Acciona Windpower in West Branch, Siemens Wind in Fort Madison, and TPI Composites and Trinity Structural Towers, both in Newton.

Tina Hoffman, Iowa Economic Development Authority’s communication and marketing director, said the industry describes Iowa "as the place where the resources meet the population."

"We have the wind and a population to utilize the power that comes from that and that’s how we have been able to get on the ground floor of some of the manufacturing we’ve seen."

She added that the agency – and the new state leadership – remain focused on attracting the supply chain piece of the industry in order to "help Iowa manufacturers diversify to become a supplier to some of these large OEMs."

The state also continues working to seize opportunities to attract foreign investment in the industry. Many of the largest manufacturers to bring production facilities to Iowa are headquartered overseas.

But homegrown Iowa businesses also are benefiting from wind energy – manufacturers such as United Equipment Accessories, located in Waverly. The family-owned business, which will mark its 60th year in 2012, produces electrical slip rings. A slip ring is a rotary coupling used to transmit electrical power or data from a stationary unit to a rotating unit.

Jesse Shearer, a design engineer with United Equipment, said the crane industry had been the backbone of the company, but five years ago the business was pulled into the wind industry by local companies servicing installed wind turbines.

At first, United Equipment supplied hub slip rings to those maintaining the small, personal wind turbines. But it eventually moved to supplying some of the major manufacturers.

"Obviously, when the economy went down we were impacted. But we were lucky enough to have wind, and wind didn’t suffer as much as other industries like cranes and construction,” he said, adding that some of their newest employees had been laid off from other companies.

Due to its involvement in wind energy, United Equipment expanded its facility, increased its work force by 25 percent and enjoyed a 42 percent increase in revenues, he said. The company also expanded its global reach as it began supplying more and more foreign companies. Today, it employs about 90 people.

Shearer said the company continues to largely supply the industry "through the back door by supplying to the aftermarket," but is still working to break into the OEMs.

Prior said that part of the success story behind wind energy is how these manufacturers have filled a gap in some communities burdened by plant closings. "Of the five major component manufacturers, three are located in former manufacturing plants," he said.

Clipper Windpower assembles its turbines in a Cedar Rapids plant where printing presses had once been made by Rockwell Goss. Trinity Structural Towers filled one of the former Maytag factories left vacant in Newton. Siemens Wind produces its tower blades in the shuttered Wabash National Corp. tractor-trailer facility it acquired in Fort Madison.

While central and eastern Iowa have captured much of the new manufacturing jobs, other regions – including the Quad-Cities – still are proactively working to attract wind energy manufacturing companies to their backyards.

Daniel Mann, the vice president of national business development for Quad-Cities First, said he has seen a slowdown in new wind investment, largely, due to the uncertain future of the federal production tax credits, which expire at the end of 2012. Even so, the staff of Quad-Cities First, the economic development arm of the Quad-Cities Chamber of Commerce, remains vigilant in its efforts to educate the industry of its strengths in manufacturing, warehousing and transportation.

While many of the large EOMs have landed in other areas of the state, Mann has his sights on Chicago, where many of the global energy companies are building headquarters. "If you draw a line through the middle from Chicago (to Iowa’s wind resources), you come here," he said.

Mann added that the Quad-Cities has benefited from the supply chain piece of the industry. "We’re positioned for the manufacturing and logistics side. Those are the good jobs and our people have the skill sets in place to support those kinds of jobs."

Hoffman, of the state’s economic development agency, admits that wind energy helped keep the economy going during the recession. It also is a sector, in which, "we have made a name for ourselves."

Jennifer DeWitt Quad-City Times,