Manufacturing Savvy

Can Stalled Government Regulations Cause Job Loss in Manufacturing?

Unfortunately, the answer is yes; at least according to Siemens AG (IW1000/34).

Yesterday DesMoinesRegister.com reported that Siemens announced it will lay off 407 of the 660 workers at its blade manufacturing plant in Fort Madison, Iowa.

The company said the layoff is in response to uncertainties surrounding the wind industry with the pending expiration of the 2.2 cents per kilowatt hour production tax credit Dec. 31.

No action is expected by congress until after the November election.

The tax credit gives wind power generators 2.2 cents for every kilowatt hour they produce for their first ten years of operation. Congress has renewed the credit seven times and let it expire three times since it was enacted in 1992.

The tax is hotly debated with some groups saying that the wind industry has become too dependent on the tax, and other groups saying that the jobs that are created with the help of these taxes are necessary for economic growth.

Whatever the debate, Siemens doesn’t seem to want to wait for the legislation and is taking matters  into its own hands.  

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