Windfall for Pipestone

  • Article by: DEE DEPASS , Star Tribune
  • Updated: June 1, 2008 - 4:45 PM

Wind-turbine maker Suzlon's arrival in Pipestone has brought success and problems.

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A 150-foot-long Suzlon V3 2.1 megawatt blade is moved into position for delivery to a new wind farm in Fort Bridger, Wyoming.

Photo: Glen Stubbe, Star Tribune

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PIPESTONE, MINN. - As Corey Juhl rounded the corner past Buffalo Ridge, a grove of windmills bloomed from a cornfield and cartwheeled against the sky. They're the Juhl family's wind turbines -- machines that jump-started Pipestone's wind movement and brought Suzlon Rotor Corp. to town from India.

Much has changed since locals first heard the name Suzlon four years ago.

Down the road at the new Suzlon plant last week, hundreds of workers hopped off buses and got to work, cutting silky fiberglass cloth that would soon be resin-treated, heated and molded into gleaming 141-foot-long turbine blades, capable of producing 2.1 megawatts of energy from wind.

Open just 19 months, Suzlon's first U.S. plant has taken off like a gale-force wind. Employment has swelled from 275 to 500. Production jumped from one blade a day to nearly three as businesses and farmers search for alternatives to coal power. Suzlon is now the fifth-largest turbine maker in the world, with about 8 percent of the U.S. market.

For the Pipestone plant, success has brought its own problems.

The plant that was lured here by a slew of local and state incentives is struggling to keep up with demand. Its blades and nose cones are back-ordered for two years.

So Suzlon is turning its attention to working smarter. New equipment coming this fall will computerize Suzlon's manual fiberglass "skin" cutting process. A new crane will soon hoist and place blades onto trucks more quickly than crews.

For now though, the company is trying to cope with the headaches that come with rapid growth.

A shortage of rental housing and workers in Pipestone forced Suzlon to bus in employees from Worthington, Minn., and Sioux Falls, S.D., at a cost of nearly $50,000 a month. Turnover remains a big problem.

And the company's image took a beating after several Suz- lon blades made overseas and sold to Edison Mission Energy in California in 2006 cracked last year.

Local company officials are under orders from management in India not to discuss that issue. Suzlon officials in India issued a statement that they are addressing the problem.

Suzlon's rise in Minnesota "has been slow-fast" success, said Dan Juhl, Corey's father and the man responsible for bringing Suzlon to Minnesota. "Suzlon is a pretty typical turbine manufacturer these days. All of them are having problems, especially now that they are going with these great big machines. They are putting something the size of a football field up into the wind. The load on these is just off the charts."

The Juhl family installed Suz- lon's 1.25 MW wind turbines in 2004. Suzlon's Pipestone plant now makes 2.1 MW machines.

The blade-cracking episode doesn't seem to have slowed sales. Suzlon Energy Limited, based in Mumbai, India, with operations in China, Russia, South Korea, Germany, Chicago and Pipestone, reported a 29 percent increase in annual sales to $1.8 billion. Each 2.1 MW turbine typically cost between $2.3 and $2.6 million, customers said.

Officials will not disclose their U.S. sales, but Pipestone plant manager Pete Schmidt said sales are growing amid America's new love affair with noncarbon-based fuel.

Minnesota is now the third- largest wind energy producer in the country, with more than 1,300 MW installed. The state has mandated Xcel, Great River and other power companies to produce 25 to 30 percent of their power from renewable sources by 2025. It's been a nice boost to wind-turbine and component makers such as General Electric, Gamesa, Vesta and LM Glass Fiber in Grand Forks, N.D.

In Pipestone, orders are pouring in from John Deere, farms across the Midwest and a growing number of companies looking to get in on the wind-power market. Suzlon just won its first Great River Energy co-op member. It installed 2.1-megawatt turbines for Nobles Cooperative Electric and Federated Rural Association in March.

Blaine Strampe, chief electrical engineer for Federated, said he heard about Suzlon's cracking problem but isn't bothered.

"It wasn't a manufacturing problem. It was a design problem. They have redesigned the blades, and those redesigned blades are now being made in Pipestone," he said, adding that he is pleased to buy local. Still, "with all the demand for wind turbines, the best one you can buy is the one you can get."

Finding workers

The strong smell of resin and paint wafted through the bustling plant recently as Hector Santiago sanded down the coarse edge of a fiberglass wing and Angelica Kassa poured and smeared resin into the blade skin. Workers nearby painted the glassy smooth finish a stark white.

Kassa took a $3-an-hour pay cut to leave a stressful nursing home job in Worthington for the Suzlon plant. Regardless, she loves it. She makes $10 an hour and could potentially make $13 or $14 an hour over time. Like many workers who arrived on buses that morning, Kassa is happy that the company doesn't charge her for transportation.

With labor-hungry neighbors such as boatmaker Bayliner Marine Corp. and Ellison Meat Co., Suzlon wants every recruiting advantage it can get, said human resource manager Susie Rennich.

That kind of problem astounds Juhl. Hearing that employment leapt from the promised 200 figure in 2006 to 500 workers, Juhl gasped: "Oh my gosh, what have I done? No wonder I can't find any workers."

Juhl met Suzlon founders in 2002 when India's key windmill man, Tulsi Tanti, showed up at his door and suggested Suzlon bring its wind turbines to farmers and communities around Pipestone.

Juhl and sons Corey and Tyler installed Suzlon machines in a nearby cornfield in 2004 and worked tirelessly to push energy-development tax breaks through the Legislature in 2005.

The Pipestone plant opened in November 2006 with the energy tax breaks, land from the city of Pipestone and 12 years of property-tax breaks provided by Gov. Tim Pawlenty's rural JOBZ incentive.

While the Minnesota JOBZ tax incentive that Suzlon received is "great," Schmidt said, "the challenge is that some businesses have opened or expanded like Bayliner. So for us, it's still a matter of 'How do I get the workforce that I need?'" With plenty of effort, payroll has grown from $9 million to about $15 million. But it hasn't been easy.

Mary Mathias, a job service specialist for the Minnesota Workforce Center, said Suzlon faced two problems: the lack of rental housing and a shortage of available workers in Pipestone.

Apartments in Pipestone are pretty much filled, Mathias said. "For someone looking to come to work there, they must look to the outside community to find housing," she said. "It's an interesting circle that we go around and around."

Dee DePass • 612-673-7725

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