A Michigan manufacturer says it will close a plant in Sumter that makes bearings for wind turbines. In a release Thursday, Kaydon Corporation blamed a wind production tax credit that will expire at year’s end.
The company said it will move production to other nearby facilities by next year. Sumter Economic Board President & CEO Jay Schwedler said he was told the personnel losses would be “minimal” and that most of the plant’s 54 employees would be transferred to other Kaydon facilities in Sumter. The company did not respond to requests for comment.
Kaydon blamed wind energy’s uncertain future in the current political climate, including a wind energy production tax credit that is slated to expire at year’s end. The Production Tax Credit subsidizes wind-power producers at 2.2 cents per kilowatt-hour.
“While we believe that wind energy will be a viable market in the long term, it will be challenged by continued regulatory uncertainty in the United States, including the impending expiration of the Production Tax Credit, and a weak global economy in the immediate future,” James O’Leary, the company’s Chairman and Chief Executive Officer, said in a statement. “Accordingly, while we will maintain sufficient capacity to serve existing and prospective customers, we believe it is appropriate to reduce wind capacity at this time.”
Looming cuts to the Defense Department could also hit Kaydon’s bottom line. In addition to wind, the Sumter plant also makes bearings for military ground vehicles.
O’Leary said Kaydon would continue to focus on its products outside of wind. “While we are resizing this product offering to reflect the current market realities, many of the capabilities developed since the initial investment in wind will serve us well in other served markets, including heavy equipment and mining,” he said in the statement, “With this restructuring underway, we remain clearly focused on profitable growth, particularly in underserved international markets.”
