GE buy will gain it wind turbines

LM Wind Power has facility in LR

General Electric Co. is acquiring LM Wind Power, one of the industry's leading wind-turbine manufactures, in a $1.65 billion deal, the two companies said Tuesday.

GE said the purchase of LM Wind Power, which has a facility in Little Rock, secures the production of wind-turbine blades for the company's renewable energy unit. The acquisition is expected to close in the first half of 2017.

"We, along with LM Wind Power, have a deep pipeline of technical innovations that can further reduce the cost of electricity," said Jerome Pecresse, president and chief executive officer of GE Renewable Energy, in a prepared statement.

"With our combined global footprint, we can build flexible solutions for customers around the world. This combination will help sustain growth in the wind power industry," he said.

GE said it plans to operate LM Wind Power, which is owned by private-equity firm Doughty Hanson, as a stand-alone unit within its renewable-energy business.

LM Wind Power will keep its current management team and headquarters in Denmark, according to the news release.

Neither company said what the deal means for LM Wind Power's facility at the Little Rock Port Authority. A spokesman for GE did not return an email seeking comment.

"That's about all we know right now," said Bill Burga, senior project director of global operations, for LM Wind Power, referring to the news release.

"This looks like a positive direction -- path forward," he added.

LM Wind Power said earlier this year that its plans to expand its facility at the Little Rock Port Authority by combining its two plant operations in the city.

The expansion will give the company an additional 44,000-square-foot warehouse and a total of 525 employees at the Port Authority facility.

Despite the plans for the expansion, the past few years have been precarious for employment and business for LM Wind Power, along with the wind industry, because of uncertainty regarding the renewal of the federal production tax credit.

The credit of 2.2 cents per kilowatt hour of renewable power expired in 2012 and then was extended several times since then.

When Congress let the tax credit expire in 2012, LM Wind Power, which had 391 workers at the time, cut 234 jobs in Little Rock. By 2013, the company's workforce here was 137.

Business started up again for the industry when Congress extended the tax credit and allowed firms to qualify for the incentive if construction began in 2013. This allowed LM Wind Power to add about 400 jobs to its Little Rock facility.

In 2015, Congress extended the production tax credit until 2019, with a phaseout period starting in 2017.

However, the company hasn't been able to reach the number of workers -- 1,100-- it expected to employ in Little Rock when it received an incentive package from the state in 2007.

As a result, LM Wind Power repaid the state $3.4 million in 2014 after a review found that the company didn't meet employment terms of the package.

"The offer from GE makes clear commercial sense for the growth of LM Wind Power and we are absolutely delighted with the prospects of having a world leader as our owner," Marc de Jong, chief executive officer of the Danish company, said in a prepared statement Tuesday.

"It provides us with the necessary stability, visibility and strength to continue to realize the ambitious growth plans of the business and fully utilize our advanced design and technology, improve our manufacturing capabilities and reliability, expand our global footprint and reduce the [cost of energy]," he said.

Business on 10/12/2016

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