Alstom cuts jobs in Chattanooga (with video)

Alstom cuts jobs in Chattanooga (with video)

March 9th, 2013 by Mike Pare in Local Regional News

Turbine components are seen at the Chattanooga Alstom plant.

Photo by John Rawlston/Times Free Press.

ALSTOM TIMELINE

* 2007 -- Alstom announces new Chattanooga plant on Riverfront Parkway.

* 2008 -- Work starts on the factory as Alstom is awarded local tax breaks.

* 2010 -- Plant officially opens; Alstom's world CEO comes to the city.

* 2011 -- Factory ships first unit.

* March 2013 -- Company cuts workforce to 60 employees.

Alstom's $300 million bet in Chattanooga on a renaissance of nuclear power has hit a snag.

Citing a lack of orders for nuclear power components, Alstom's turbomachinery plant that opened here in 2010 will slash its workforce to just 60 employees by year's end, an official said Friday.

"The ultimate driver is that people are not ordering new nuclear," said Tim Brown, Alstom's communications director. "There's not the demand for nuclear [that there was] when we built the factory."

The Paris-based giant announced it is restructuring the $300 million plant's operations and cutting 80 jobs.

But last year, Alstom officials at varying times had put the plant's workforce at between 230 and 270. And as late as last August, during a visit by U.S. Sen. Bob Corker, R-Tenn., the plant's then-chief said the company was on pace to hit a target to 320 jobs by early this year.

However, Brown said Friday the planned-for nuclear resurgence, which the 350,000-square-foot plant was built to tap, has been slow to come about. He blamed the Fukushima, Japan, nuclear power plant accident two years ago for helping dampen growth in the energy segment since then.

He also cited the emergence of plentiful and relatively cheap natural gas from U.S. shale reserves.

Brown said the Chattanooga plant will refocus on existing needs in the power industry. That includes work for coal- and gas-fired power plants as well as nuclear, he said.

Brown said that Alstom's adjacent boiler repair plant will be unaffected. It employs 400 people, he said.

Still, a Chattanooga Area Chamber of Commerce official bemoaned the job losses at the turbomachinery plant.

"It's an unfortunate thing," said J.Ed. Marston, the Chamber's vice president of marketing. "Our first concern is with the people who have been laid off."

Alstom will retain local property tax breaks on its new facility until 2014, he said. Marston said the company has until then to meet its commitment to employ 300 people, and he noted that Alstom overall will employ 460 people in the city.

Chattanooga Mayor Ron Littlefield said he remains confident the tax incentives have and will pay off for the city.

"I'm certainly proud of the investment that Alstom has made in Chattanooga," Littlefield said. "They certainly poured a lot of money into what was a rusting hulk on the riverfront. They promised to make it a showcase, and they have. We promised to extend the Riverwalk to them, and we're doing that. We're following through on our commitments, and I have no doubt that they will follow through on theirs."

Moving ahead, Brown said Alstom will adapt to market conditions. Plans are to preserve the entire plant's industrial capability for "when the market rebounds" and there are added opportunities, he said.

Until then, the factory will provide machining, assembly and balancing operations for steam turbines in existing nuclear and coal plants as well as make equipment for natural gas facilities, the company said.

"The factory is designed to be flexible," Brown said. "You have to adjust the factory to allow you to be competitive."

Also, Brown said a new factory director is on the job. Brad Vandehei has taken that role. he reports to Lawrence Quinn, President of Chattanooga LLC, the senior executive at the turbomachinery factory.

Business Editor Dave Flessner contributed to this story.