Decline in wind projects, global economy blamed
BRUNSWICK — Owens Corning on Tuesday ordered a 30-day furlough for 50 of its Brunswick employees, a decision the Toledo, Ohio-based company said was partially due to a global slowdown in wind-power projects and sagging demand for its composites material.
The temporary layoff is scheduled for 30 days and part of Owens Corning’s effort to trim 10 percent of its global composite production capacity.
Earlier this week, the company laid off 250 employees at its Amarillo, Texas location.
Owens Corning’s Composites Solutions sector has about 40 locations worldwide. The Brunswick furlough is Owens Corning’s third work stoppage or layoff this year and the sixth since 2008.
The furlough affects over half of the company’s Brunswick workforce. Scott Deitz, Owens Corning director of communications and investor relations, said the work stoppage primarily targets production workers.
Deitz said the furlough could extend beyond 30 days if the composites sector doesn’t rebound.
“The business environment that brings us to this furlough is simply a result of the global economy,” said Deitz, who added that the economic downturn in Europe and the Asia Pacific was having a global impact on the company’s composites industry.
Deitz also said that a global squeeze on bank lending was affecting one of Owens Corning’s hopes for a financial turnaround: wind energy.
The company is the world’s largest producer of the glass fiber used in wind turbine blades. Deitz said it takes about 6 tons of fiber to make a single blade.
The Brunswick location, he said, plays an integral part in the production process.
The fiber has approximately 40,000 applications, including everything from phones and boats to skis.
But, Deitz said, demand for the glass fiber had unexpectedly dropped as the economy weakened.
In 2008 analysts projected a 20 percent increase in demand every year for the next five to 20 years.
Now, Deitz said, analysts are predicting demand to either remain flat or rise 10 percent.
Optimistic projections partially ride on the proliferation of domestic wind power projects. While the number of U.S. wind projects rose in conjunction with spiking oil prices and awareness, Deitz said the national lending squeeze by banks and lower oil prices were thwarting industry growth.
“This is me speaking, not the company, but unfortunately energy policy in this country is defined by how much we pay for gas at the pump,” Deitz said.
While Europe outpaces the U.S. in both the number and sophistication of wind projects, Deitz said the number in the pipeline is declining there, too.
Deitz said Owens Corning is hopeful that green energy initiatives proposed by President Barack Obama and tax credits in the recently enacted federal stimulus package will spark a turnaround for wind.
Brunswick remains just as hopeful.
The furlough is a significant blow to the region’s highly-touted composites cluster. Growth of the cluster has led to the expansion of Southern Maine Community College, which created the Advanced Technology Center for training in composites manufacturing.
A recent expansion at the Brunswick Industrial Park was driven by the composites industry.
“We’re disappointed any time our local workforce is affected this way,” Interim Town Manager Gary Brown said. “But we’re hopeful (Owens Corning) is going to rebound and expand.”