Siemens Energy is considering closing offices and manufacturing sites to address its loss-making wind turbine business, according to reports.
Alongside potential closures and layoffs at its Siemens Gamesa arm, the German energy giant is also considering outsourcing the production of key turbine components like blades in order to aid margins, Reuters reported on Monday.
In June Siemens Energy’s share price dropped by as much as 36% after it reported a “substantial increase in failure rates of wind turbine components” made by its Gamesa unit.
The announcement came just over six months after Siemens Energy (ENR:Xetra) took control of the former Gamesa joint venture in late 2022, following a long battle with supply chain issues and loss-making contracts.
The firm estimated charges so far of around $2.3 billion, later adding that it expects costs of around €1.6 billion to fix flaws in Gamesa’s onshore turbines.
In August Siemens Energy said it would conduct “a detailed investigation of the quality and productivity problems” with a task force of experts from Siemens Gamesa, Siemens Energy and Alix Partners.
It also noted that “certain third-party suppliers” would be excluded from further deliveries.
The Siemens Gamesa unit operates some 79 sites in total, spanning sales and service offices, R&D centres as well as 15 factories which produce blades and nacelles.
That list currently includes an offshore blade factory in Hull, which employed over 1,000 people in 2021.
Some of those sites could be closed or put under temporary hibernation according to sources reached by Reuters, as the company looks to other supply chain firms to produce components.
Reports suggested that further details of any restructuring plans could be unveiled in November, during the company’s annual results announcement and a subsequent capital markets day.
No final decisions have been taken and details of the restructuring programme could still change, according to people familiar with the matter.
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