The shutdown of a wind turbine blade factory in Newton will be an economic blow to the area, but an Iowa State University economist says the impact will not be the same as when Maytag left the community.
TPI Composites started making blades in Newton about a year after Maytag stopped making washing machines in 2007. Now, TPI plans to stop production and lay off 710 workers by the end of this year.
That’s a lot of jobs for a city of around 15,000 people, said ISU economist Liesl Eathington. But she points out TPI doesn’t have the same history in Newton as Maytag, which operated there for more than 100 years. The impact is more isolated because TPI has fewer ties to local suppliers.
“It’s a blow, definitely, but because that firm was not as deeply rooted into the local economy as Maytag had been I don’t think the consequences are going to be felt as much,” Eathington said.
Another change since Maytag closed, Eathington said, is that the economies of Newton and Jasper County are more connected to the Des Moines metro, which provides stability.
“The residents of Newton are comparatively less dependent on that single plant,” Eathington said. “There's a lot stronger commuting flows now between Newton and the Des Moines area.”
TPI Composites had been contracted to make blades for General Electric. But GE is not planning to buy blades from TPI for its wind turbines next year. That change is what is causing the plant to shut down.
Still, the wind industry is on a growth trajectory, according to Pavel Molchanov, a stock analyst who covers TPI for the investment firm Raymond James.
“There is lots of demand for wind turbines all over the world, and there are about a dozen large manufacturers of wind turbines,” Molchanov said. “So, if GE does not want to buy blades from this particular factory, it does not mean that nobody wants them.”
Molchnov says with GE out, a new customer could come in to buy blades made in Newton.
“In fact, very likely there will be a replacement customer to buy blades from this factory, but it’s not going to happen instantaneously,” he said.
TPI did not respond to an email asking whether the company is actively searching for a new customer for the plant.
Molchanov says if TPI does find a new client, it will take time to create a new design for the customized blades and to retrofit the Newton plant to build them. That process wouldn’t come soon enough to avoid layoffs for the current employees, he said, but could lead to the company rehiring in the future.
Eathington said the silver-lining for current TPI workers is that other employers in the area likely have open positions.
“Those workers might have a slight advantage because they're already familiar with the manufacturing environment,” Eathington said. “Their prospects of finding other employment in manufacturing are probably pretty good, given the current concerns about workforce shortages.”
