First Minister intervention plea as jobs go at CS Wind
By Martin Williams Senior News Reporter
THE First Minister is being urged to intervene amid concerns Scotland is
missing out on a wind farm jobs boom, as it emerges another major firm lost
out on a key contract.
A circular message from CS Wind, based near Campbeltown in Argyll – the
only UK facility manufacturing onshore and offshore wind towers – reveals
that hopes of preventing the axing of 80% of the staff remain slim, while
it also confirms it has lost vital work on a Scottish wind farm.
Unite raised concerns that 22 had already lost their jobs this week.
The factory, bought over by the South Korea-based firm in 2016, has
announced it will cut up to three-quarters of its workforce, despite
recording pre-tax profits of £7.1 million last year.
The update – signed off by the managing director Yun-Cheol Kim – confirmed
that a major project to deliver towers for the Beinn an Tuirc wind farm
would “no longer” be manufactured at CS Wind’s UK factory.
It has prompted the union Unite to write to Nicola Sturgeon to make a last
ditch appeal to rescue the company and appeal to her to help breathe new
life into Scotland’s wind farm industry.
In 2010, a Scottish Government report stated the offshore wind sector alone
offered the potential for 28,000 direct jobs and a further 20,000 jobs in
related industries, as well as £7.1bn investment in Scotland by 2020.
But Unite says this turns out to be “yet another fantasy in the so-called
green jobs revolution”, claiming the current offshore wind direct jobs
figure is at 1,900.
In a report last month, RenewablesUK estimated floating wind farms can
support 17,000 UK jobs by 2050, and £33.6bn of economic activity.
CS Wind were involved in the Beinn an Tuirc wind farm project on the
Kintyre peninsula believed to consist of 18 turbines.
Last month, ScottishPower Renewables, announced that it had begun work on
the Amazon backed project which was to see 50MW of green energy, enough
each year to power the equivalent of 46,000 homes.
ScottishPower had then stated the project would be powered by turbines
supplied by Danish-owned Vestas, with the towers for the wind turbines
being supplied by CS Wind.
Up to a hundred new jobs were expected to be created at the site over the
lifetime of the project and it was announced CS Wind were on board.
Unite believe CS Wind lost the Beinn an Tuirc contract due to the
uncertainty surrounding the factory. It was believed the contract would
have provided the factory with a two months of work until other contracts
could be secured.
Staff at CS Wind have now been told that many meetings with Government
officials, Highlands and Islands Enterprise, and union leaders have “not
given us any positive outcomes so far”.
Mr Kim said in a circular seen by the Herald: “Despite all efforts to date,
there remains a significant high risk of redundancies of around 80% of the
workforce at all levels. Currently it is expected that approximately 20% of
employees will be retained to complete our contractual obligations.”
It is understood that would mean up to 73 jobs would go at the factory,
which has a total workforce of 94.
Pat Rafferty, Unite Scottish Secretary, “Unite is extremely concerned about
the future of CW Wind. It’s the UK’s only facility which manufactures
onshore and offshore wind towers, however, 120 workers face redundancy in
the coming weeks.
“This is due to contract gaps but the position has been exacerbated by CS
Wind’s decision to announce redundancies at precisely the same time as they
are awaiting news on bids for contracts.
“If CS Wind is successful it would keep the workforce employed for a
further year but the contract could be on the brink of being lost unless
the factory receives concrete support from the Scottish Government.”
Unions are already angry over what they see as “the scraps off the table”
that Scotland has received in the work on the £2 billion Neart Na Gaoithe
(NnG) wind farm off the Fife coast, awarded by EDF, the French state energy
giant.
It is understood that in a key contract – it is proposed a minimum of eight
of 54 steel foundation jackets which anchor the turbines to the seabed will
be built in Scotland with the rest being constructed in south east Asia.
Scotland has lost further important project work, worth hundreds of
millions of pounds to England, Germany, Finland and France as part of the
deal.
“It will be unforgiveable and disgraceful if the factory is left to wither
on the vine, particularly, in the aftermath of the abject job creation
arising from EDF’s announcement on the Neart na Gaoithe project,” added Mr
Rafferty.
“The Scottish Government are hiding behind the headlines of multi-billion
pound contracts when the reality is that there is no renewables jobs
bonanza in Scotland and our manufacturing capacity could be reduced to next
to zero if CS Wind is not saved.”
In his letter to the First Minister, Mr Rafferty has told of the “worrying
situation” facing the CS Wind workforce but said that a decision over a
contract to provide 40 towers for Hornsea Project Two could be a lifesaver
– providing 12 months of work.
“I am sure you will agree that it would be disastrous for Scotland’s
renewables manufacturing capacity if CS Wind lost out due to the ongoing
uncertainty over the factory’s future. I would, therefore, ask that an
urgent intervention is required including a meeting involving Unite, CS
Wind and those Ministers with the relevant ministerial responsibilities…
to ensure that as much as possible is done to secure future contracts at CS
Wind.”
Accounts lodged by CS Wind in April show directors saw the outlook for the
next financial year as “positive”. It posted pre-tax profits in 2018 of
£7.1m – up from a loss of £191,000 in 2017.
The business has made a £27m investment in the facility since taking over,
while also having deals with Danish firm Orsted and Swedish company
Vattenfall.
It has blamed the move on challenging market conditions for onshore towers
and difficulties with supply chain companies in the offshore sector.
A Scottish Government spokesperson said: “This has been a very difficult
time for workers at the CS Wind tower facility at Machrihanish and our
priority has been to support the company in its attempts to secure future
work for the site to plug a gap in its order book.
“We have explored all areas where we can assist the company to retain its
workforce for the longer term, such as funding infrastructure improvements
to lower transport costs, but the Scottish Government does not have a legal
route to gap fund manufacturing itself as this would constitute a breach of
State Aid regulations. Clearly, the site has also been hurt by the
reduction in onshore wind construction, arising from inexcusable exclusion
of that technology from recent Contracts for Difference auction rounds and
the ending of the Feed In Tariff regime.
“The Rural Economy Secretary hosted an economic summit in Campbeltown
bringing together local stakeholders, the Scottish Government, our agencies
and local employers to identify possible economic opportunities for the area.
“In the event of any employees ultimately facing redundancy, which we are
working hard to avoid, we would provide support through our Partnership
Action for Continuing Employment (PACE) initiative.
“Renewables are a crucial part of our transition to a low-carbon economy
which is why earlier this year we convened an offshore wind summit with
unions, companies and other interested parties who agreed to take urgent
action to ensure more companies benefit from the awarding of contracts for
offshore wind projects. We will be reconvening this summit early in the new
year.
“The Minister for Energy, Connectivity and the Islands has highlighted the
challenges to the onshore wind supply chain caused by removal of support
and, in respect of offshore wind, has continued to call upon the UK
Government to consider how the Contract for Difference (CfD) process can be
restructured to consider the value added to the Scottish and UK economies
and to encourage wider and more meaningful use of the Scottish and UK’s
supply chains.”
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