LM Wind Power announced the closure of their blade production factory in Turkey that employed 700 people. In Denmark, LM Wind Power appears to be cutting highly-qualified engineering and support staff. This news comes just days after their parent company, GE Vernova, became a stand-alone company.



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Allen Hall: I'm Allen Hall, president of Weather Guard Lightning Tech. And I'm here with the founder and CEO of IntelStor, Phil Totaro. And this is your News Flash. News Flash is brought to you by our friends at IntelStor. If you want intelligence that generates revenue, then book a demonstration of IntelStor at IntelStor. com.



A lot of news coming out of LM Wind Power. today. This is Friday, April 5th. All news reports indicate that the facility in Turkey is being closed and has been closed for a couple of days, evidently. And there is a massive shift happening, layoffs, at least 700 in Turkey. It sounds like up to a couple hundred, mostly focused in Denmark at the moment.



Phil, what is happening behind the scenes here?



Philip Totaro: There's quite a bit. Obviously what G. E. Vernova has said publicly about this and LM for that matter, is that they want to focus on profitability. And simply put, they just didn't seem to have enough order book to justify continuing the factory in Turkey.



Now we've talked before on the show about the fact that Turkey has one thing going for it as a market, which is not just the domestic demand that they've got which is reasonable, although not entirely robust but they have a favorable currency trade against the U. S. dollar, which means that if you're using Turkey as an export market, it's theoretically is a great place.



TPI's there. There are a few other companies that have manufacturing facilities there. But the issue for LM is they weren't for the blade lines that they have in Turkey. They weren't getting enough orders for those blade lines that they have set up. And so I guess for them, it makes more sense to consolidate into their production facilities in Spain and Denmark.



As well as what they have currently in, in North America. And India and China for that matter.



Allen Hall: Several months ago, LM Wind Power was headed a direction of essentially separating Europe from the Americas, and running it as two separate businesses. And now this happens. Now there's some significant layoffs happening in Denmark.



You still think they're headed in that direction, trying to grab separate marketplaces and maybe react differently to those changing economics?



Philip Totaro: Yes, there, nothing seems to have changed based on, some of the internal memos and things like that, that have leaked out the where they suggested that they're going to be doing this reorg.



But the reality is that again with the focus on profitability I believe that it makes sense for them to to do something that's regionally segregated. Depending on how they want to proceed with the business moving forward, whether it's divesting factories or acquiring factories, there, there's any number of things they could do that is theoretically made easier by regionally grouping assets together.



Allen Hall: The people that are being laid off in Denmark, from what I can tell at the moment seem focused in engineering, maybe support engineering too, high level. paid long term employees that they're are laying off.