Nordex Group plans to cease rotor blade production at Rostock site in Germany

Nordex Group’s “DMR” nacelle assembly plant, Engineering and Service organization in Rostock not affected.

Today, the Nordex Group has informed staff at the Rostock GVZ rotor blade site in Germany about considering to cease manufacture of rotor blades at that site at the end of June 2022. A reconciliation of interests and a severance scheme are to be negotiated with the works council in the short term in order to make the planned reduction in force socially acceptable. About 600 of a total of 8,600 employees worldwide would be affected at the GVZ. In Germany, the Nordex Group employs about 3,150 people.

The increasingly challenging market environment and strong competition together with a shift in demand require Nordex Group’s global production and sourcing processes to be adapted.

Since the introduction of the auction system in most of the energy markets, the industry has been globally characterized by increasing price competition. Those power producers who submit the lowest bids are awarded the contract and then pass on the price pressure to the turbine manufacturers. They, in turn, have to reduce their production costs to remain competitive. The cost of energy production from wind have halved in the last five years and this development has had a negative effect on the manufacturers’ profitability.

Against this backdrop, blade production at Rostock is, despite the cost-saving measures already implemented, not competitive within the Nordex Group’s global production network and worldwide project business. Additionally, the Rostock plant manufactures blades for turbines with a 149-meter maximum diameter. The global trend has been developing towards more efficient turbines with ever longer rotor blades. Consequently, demand for the blades which can be manufactured at Rostock will continue to decline.

José Luis Blanco, Nordex Group CEO: “The wind industry operates in a highly competitive, global market that is mainly cost-driven. Against this background, we must optimize our global production and sourcing processes in order to ensure profitable production and to secure the Nordex Group’s competitiveness. As a German and European-based company, we particularly regret that we do not see an alternative to this painful measure. We need an industrial policy that aims for a sustainable and comprehensive way to decarbonize and foster supply chain independency.”

Apart from the rotor blade production, Rostock is also home to a nacelle, hub and drive trains production site (DMR) as well as to Engineering and Service organization staff. These employees are not affected.

The Group has installed more than 35 GW of wind energy capacity in over 40 markets and in 2020 generated revenues of EUR 4.6 billion. The company currently employs a workforce of approx. 8,500. The joint manufacturing capacity includes factories in Germany, Spain, Brazil, the United States, India and Mexico. The product portfolio is focused on onshore turbines in the 4 to 6.X MW class, which are tailor-made for the market requirements of countries with limited space and regions with limited grid capacity.