AMSC (NASD:AMSC) will shutter its manufacturing facility in Middleton, Wisconsin by the end of 2014, but hopes to fold its product development operations and employees that are willing to relocate into its headquarters in Devens, Massachusetts, which recently underwent a workforce reduction.
While it consolidates its U.S. workforce, AMSC plans to open a new wind turbine controls manufacturing facility in Timisoara, Romania in 2014, which will serve all of its clients outside of China. Its Chinese facility will continue to cater solely to China customers. With this move, AMSC corporate communications manager Kerry Farrell said it has better access to reach its “target market” of Eastern Europe and allows it to be closer to its Austria facility. According to the REW 2014 wind outlook, there is much promise in emerging northern and eastern Europe despite overarching policy uncertainty.
“By expanding our manufacturing footprint into Eastern Europe, we are enhancing our distribution capabilities and our global reach in a region that is a target market for our wind and grid products,” explained AMSC CEO Daniel P. McGhan. “Romania is a European Union member state and cost-efficient manufacturing location with a highly skilled workforce and reliable infrastructure.”
Overall, AMSC said these changes will reduce its workforce 5-10 percent from its 330 total employees as of March 2013. The transition process will cost the company anywhere between $4-6 million by the end of 2014. However, it expects these changes to ultimately save the company $3 million annually, and to be cashflow positive by its fourth fiscal quarter, said Farrell.
Meanwhile, AMSC continues to struggle in court with wind turbine manufacturer Sinovel after it accused the Chinese company of stealing its intellectual property in 2011. AMSC has filed four separate lawsuits and is seeking more than $1.2 billion in damages against what used to be its largest customer. According to Bloomberg, China Supreme Court recently ruled in favor of AMSC in two of its suits, and the cases will be heard in court, rather than being moved to arbitration at Sinovel’s request. Despite the litigation, AMSC continues to focus on product development.
“Key to our growth strategy is product development and the development of system solutions…[yesterday’s] action will help to ensure that we are in the best position to deliver these products to market,” said McGhan. “The strategic initiatives we are announcing today mark the beginning of a new chapter for AMSC as we focus more intently on manufacturing and product development across all lines of our business.”
Meg Cichon is an Associate Editor at RenewableEnergyWorld.com, where she coordinates and edits feature stories, contributed articles, news stories, opinion pieces and blogs. She also researches and writes content for RenewableEnergyWorld.com and REW magazine, and manages REW.com social media. Formerly, she was an Associate Editor of ideaLaunch in Boston, MA. She holds a BA in English from the University of Massachusetts and a certificate in Professional Communications: Writing from Emerson College.
This article was first published on RenewableEnergyWorld.com, and is republished with permission.