Project deflates: No wind turbine plant

2012-04-22T00:00:00Z 2012-04-30T14:24:22Z Project deflates: No wind turbine plantBy Tim Trainor of The Montana Standard Montana Standard

Two years ago, Butte was abuzz after a German wind turbine manufacturer said it would build a $25 million plant in the Mining City, providing a jolt for both the local and state economy.

Joachim Fuhrländer, chairman of Fuhrländer AG, gathered economic development officials at the Butte-Silver Bow Chamber of Commerce to say that his company was “here to promise again (we will come) to Butte.”

Gov. Brian Schweitzer led a tour of the 40-acre site in the Butte TIFID west of town, where the factory was planned to be built. Schweitzer explained the workforce training grants for which Fuhrländer would qualify and hosted the contingent that evening at his Georgetown Lake home.

The factory would have been an incredible coup for Montana, as Fuhrländer had considered locating its first North American manufacturing plant in a number of Midwest states as well. It would have brought hundreds of well-paid, steady jobs to the local economy and may have spurred hundreds more in off-shoot and supply businesses.

Two years later, Fuhrländer has disappeared from the Butte radar screen. The company never built a factory in North America as a worldwide recession and a sharp decline in the wind energy industry, especially in the United States, doomed the company’s expansion plans for the continent.

“(Fuhrländer) needed to ink a contract to economically justify the investment,” said Evan Barrett, chief business development officer for Gov. Schweitzer’s office of economic development. “They never got that.”

A number of factors combined to keep Fuhrländer from landing that “anchor customer” and expanding to Montana. According to industry analysts, about half as many turbines were installed in the United States in 2010 compared to 2009, causing prices to tumble just as the company was making promises to Butte. Yet, demand for wind turbines in North America had been stagnate as early as 2008 and Barrett said federal polices “led a number of manufacturers to conclude that the boom-and-bust cycles in the U.S. are too risky.”

THE BOOM

In 2007, Montana first began to make headway with Fuhrländer, a family-owned wind turbine manufacturer based in the small town

of Waigandshain, Germany. The company, successful in Europe, was looking to expand across the Atlantic Ocean.

At that time turbines were on back order, with many manufacturers having sold their inventory long before they had been built.

The industry was expanding, and Montana, with its ample wind resources and business-friendly climate, was well positioned to be a major player. Fuhrländer took note.

Then came the mortgage crisis, the housing crisis, the crisis on Wall Street and economic crises in numerous countries in the European Union. Some of the tax credits available to wind energy companies dried up and so, too, did large investors.

The Fuhrländer project hit the skids. And coming to that realization was a tough blow to those in the economic development game, both locally and in the state office.

“Anytime you put a lot of effort into something that doesn’t come through it’s disappointing,” said Karen Byrnes, director of community development for Butte-Silver Bow.

Yet, projects with great promise falling through are a natural part their jobs.

“In economic development, (if you land) one out of every eight or 10 projects you get involved in, you’re doing great,” said Jim Smitham, director of the Butte Local Development Corp. “Some of them take a long, long time.”

But most of them aren’t sporadically splashed across the front page for a couple of years. Smitham said the public nature of Fuhrländer’s wooing showed why the Butte development community often plays things close to the vest.

He said Fuhrländer is “a caustic example of a project that was announced too early.”

“People were very excited about it and rightfully so, because it would have been a huge hit for us,” Smitham said. “But when it doesn’t come through there is huge disappointment and people are left wondering what happened.”

Butte-Silver Bow Chief Executive Paul Babb agreed.

“It’s always disappointing when a project is announced (and it doesn’t happen),” said Babb. “Butte has had too many false hopes.”

According to Barrett, Fuhrländer’s plans for Butte became public in the early stages because that is what the small, privately held company wanted.

“That’s unusual,” he said. “And having done this for 25 years, you never want to be too public on the front end. Economic development is not for the impatient or the fainthearted.”

NO BLAME GAME

The package that Montana and Butte-Silver Bow put together has not been faulted for failing to land the company.

“We put together a good proposal,” said Smitham. “We stretched our incentives as far as we could.”

From the state perspective, Barrett agreed.

“It was a very good package,” said Barrett. “Obviously they liked the package and it was rewarded with the site decision.”

Out of control economic realities put the kibosh on the project, at least for now.

But no one is prepared to give up. The passage of time is not kind to a project of this size, but Barrett said Montana and Butte-Silver Bow now “have a sharpened tool and package on the shelf that is ready to be dusted off and modified.”

Smitham, too, is not ready to close the book.

“It could very well resurrect its head,” he said. “We are still open to welcoming Fuhrländer here in Butte. They may still have views to get into the U.S. market and if they do, I hope they still remember what they told us.”

FUHRLANDER TODAY

Yet, the company's plans in North America remain muddled. Fuhrlander NA has eight employees still working on the continent, but as yet have not made significant capital investment.

"We are very much committed to the North American market as our continued and expanded presence here shows even in these difficult economic times," said Matthias Weigel, director of sales and project development for Fuhrlander NA.

However, it's next expansion will be elsewhere. South of the Panama Canal, Fuhrländer has invested millions of dollars and signed contracts worth millions more.

In February, Fuhrländer agreed to sell $524 million in wind turbines in Brazil, according to Forbes Magazine. Later this spring, they plan to break ground on a multi-million wind turbine manufacturing plant, similar to what they had planned for Butte, in Brazil’s northeastern-most state.

Fuhrländer has also looked to breaking into the energy market in Eastern Europe, namely Ukraine and Romania, according to German media reports.

COUNTY DIDN’T LOSE MUCH

Butte-Silver Bow spent about $15,000 to help finance a business plan and feasibility study for the company, small potatoes compared to the economic benefit it would have brought to the area.

Babb said it is “bad business” to not invest a small amount of initial money in order to get a better idea of the viability of the project.

“It not like the old days when we’d just roll out the red carpet and not do our homework,” he said. “We were very aggressive with this, but sometimes you’re not successful just because the timing isn’t right.”

— Reporter Tim Trainor may be reached via e-mail at tim.trainor@lee.net or phone at 496-5519. Follow him at Twitter.com/@Tim_Trainor.

Copyright 2015 Montana Standard. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(22) Comments

  1. Dolfinfan
    Report Abuse
    Dolfinfan - April 25, 2012 12:36 pm
    Don't all you paranoid conspiracy theorists ever get tired of spreading your gloom and doom scenarios? Judging from all the comments in this and other news sites, the USA must be THE most unhappy place on the face of the earth, despite all the blessing we have. Go help someone for effs sake!
  2. ibfishn
    Report Abuse
    ibfishn - April 25, 2012 8:28 am
    The news last night said they were not doing the wind farm because people have cut back energy use and the market would not be as good as they need it. Funny the libs come right out and say they have to raise our electric rates( Obama said basically they will sky rocket) then the people cut back on the their energy use and now no wind farm. Kind of funny don't you think!
  3. DrivebyGravy
    Report Abuse
    DrivebyGravy - April 25, 2012 6:58 am
    Thanks Paul babb rofl.
    Colorado got a huge windmill plant
  4. moreinfo
    Report Abuse
    moreinfo - April 24, 2012 8:36 pm
    At least we still have the supercomputer to fall back on.
  5. DrivebyGravy
    Report Abuse
    DrivebyGravy - April 24, 2012 6:57 am
    Heard butte might get the Olympics a professional football team or the Brooklyn bridge?
    Oh wait our speed skating eyesores in ruins smdwe can't even get a target or Costco!
    We need to water our boulevard trees and clean up city entrances and quit free booze festivals.
  6. butte59701_com
    Report Abuse
    butte59701_com - April 23, 2012 10:28 pm
    Joachim Fuhrländer on TV in China...

    I was watching TV World News ( Apr.28 ) on PBS from Germany and there was Joachim Fuhrländer signing a Huge $60 Billion contract with China to build the next generation of light weight turbine.

    Did you actually believe that the Gov., Babb, and the other Gaggle of Clowns could even think BSB ever had a chance to land something like this compared to China??

    Joachim Fuhrländer was just having fun with "The Country Bumpkins" Here in BSB. Every time He left, you could here the deafening roar of laughter all the way from Germany.

    The U.S. hasn't had a energy policy in a decade and the Chinese workforce is Highly skilled and educated while the U.S. Banks are thinking of raising the rates for student loans for your For Profit Colleges placing education out of reach of most!

    BSB deserves everything it gets!
  7. DrivebyGravy
    Report Abuse
    DrivebyGravy - April 23, 2012 9:38 pm
    Bp oil spill refinery poison

    Jdee said: "Wake up politicians it's time for the USA to become energy independent. Yes drill but the obama cronies and obama consider that evil.We have a "green peace president" totally out of touch with the people of this country.P.S. the unions love this incompetent president he is a union man.Drill baby drill governor.November 6 approaching."

  8. DrivebyGravy
    Report Abuse
    DrivebyGravy - April 23, 2012 9:37 pm
    Oil is short term

    Don't forget bp oil spill? Horrible killing of the gulf.
  9. Jdee
    Report Abuse
    Jdee - April 23, 2012 6:26 am
    Wake up politicians it's time for the USA to become energy independent. Yes drill but the obama cronies and obama consider that evil.We have a "green peace president" totally out of touch with the people of this country.P.S. the unions love this incompetent president he is a union man.Drill baby drill governor.November 6 approaching.
  10. butteisthebestplaceonearth
    Report Abuse
    butteisthebestplaceonearth - April 23, 2012 5:52 am
    The photo looks like a eighties band

    Where are the jobs Paul babb?

  11. tonka5150
    Report Abuse
    tonka5150 - April 22, 2012 9:52 pm
    Taxes and the dam unions , Butte needs to change, I wouldnt put money here because of both ! The people want it but the people in power wont budge !!!!!!!!!!!!!!!
  12. butteisthebestplaceonearth
    Report Abuse
    butteisthebestplaceonearth - April 22, 2012 6:46 pm
    We need to lean up this town or no one will invest but homegrown
  13. butteisthebestplaceonearth
    Report Abuse
    butteisthebestplaceonearth - April 22, 2012 6:31 pm
    Butte isn't really the crossroads of interstate or railroads. Its an isolated union outposy
  14. butteisthebestplaceonearth
    Report Abuse
    butteisthebestplaceonearth - April 22, 2012 6:30 pm
    Vestas in Colorado got the jobs
  15. newcpa
    Report Abuse
    newcpa - April 22, 2012 6:23 pm
    Of course no big business is going to plant it's roots in Butte. Take a look at the city - the quality of living is lower than anywhere else in the state, schools are not good, and the city fathers are corrupts as all heck. Butte is dying - get used to it, or do something and CHANGE it! Start with the government - let some people who aren't Butte cronies in.
  16. yetty
    Report Abuse
    yetty - April 22, 2012 4:49 pm
    What now governor?At least you were here for opening of the M&M and the new disstillery thingy.
  17. crcologuy
    Report Abuse
    crcologuy - April 22, 2012 10:36 am
    we will buy the oil from Brazil, they will then build their wind farms with American dollars, you know we are gladly lending money to Brazil to explore, drill add refine their oil so we can be a major customer for Brazil's oil, but not Canada's
  18. DrivebyGravy
    Report Abuse
    DrivebyGravy - April 22, 2012 8:53 am
    Vested in weld county Colorado

    Pass the canola please!

  19. Comparadun
    Report Abuse
    Comparadun - April 22, 2012 8:49 am
    One can surely understand that if building a plant is dependent on getting a contract for the product, and you dont get that contract, there will be no plant

    However, why all the hoopla from the state and local government, before the contact for the product is signed, sealed and delivered?
  20. DrivebyGravy
    Report Abuse
    DrivebyGravy - April 22, 2012 8:47 am
    Nice job Paul babb. Seen the windmill factory in Greeley? 2000 jobs?
    How is the super computer coming rofl?
    A water park will draw tourists from Helena Bozeman and Missoula!

  21. uptown
    Report Abuse
    uptown - April 22, 2012 7:30 am
    Jdee said: "Drill for oil and natural gas in the U.S. A. and forget about this nonsense.We have huge reserves here."

    --
    We have huge reserves that will be economic to produce when the price of oil is consistently above $150 per barrel. If you expect cheap oil from US sources, think again. Actually if you expect cheap oil from any source, think again.
  22. Jdee
    Report Abuse
    Jdee - April 22, 2012 6:38 am
    Drill for oil and natural gas in the U.S. A. and forget about this nonsense.We have huge reserves here.

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