After rapid growth, new Vestas leader confronts stalled market

Martha Wyrsch entered the U.S. wind turbine business at a time of declining demand.

It was unfamiliar territory for Vestas A/S, the massive Danish wind turbine maker that hired Wyrsch in June to head its Portland-based North American headquarters.

“In the past, companies like Vestas with a great reputation have had the luxury of being order takers,” she said. “We’re having the reverse of that now.”

In seven months, Wyrsch has already developed a plan to restructure Vestas’ U.S. sales strategy, while simultaneously working to strengthen the company’s relationships with existing customers.

What she hasn’t done is make a decision on the company’s corporate headquarters project, which city officials lauded in late 2008 as a major economic development win for the city.

Vestas in December 2008 announced plans to build a 600,000-square-foot building in Portland to house its North American headquarters, which are now sprawled across five buildings in downtown Portland.

Initial plans called for breaking ground in late 2009, but the weak global economy brought those plans to a halt. Wind turbine sales had grown at a pace of 29 percent annually the past several years, but that growth dropped significantly in 2009.

Wyrsch said Vestas’ Portland operations — which include sales, installation and service duties for North American customers — are still in need of more space. The company employs 500 locally.

“Where we are today, we’re pretty much bursting at the seams,” she said.

But the economy has forced the company to revisit its options.

Along with new construction, the abundance of available properties for lease in the Portland market has the company considering existing space. The office vacancy rate in Portland’s central business district is 10.7 percent, according to NAI Norris, Beggs & Simpson.

The Portland Development Commission continues to help Vestas hunt for a location, said spokesman Shawn Uhlman.

But Wyrcsh isn’t in a hurry to bring resolution to the company’s space constraints.

“I’ve asked everybody to step back and show me all the options,” she said, “I don’t see anything happening until early to mid-2011.”

She enters a wind energy market at a trying time.

Lower wind turbine prices — combined with a decrease in wind power installations due to the unavailability of financing — will decrease wind turbine revenue in North America until at least the second half of 2010, according to online research company companiesandmarkets.com.

While the federal stimulus bill has provided developers a new avenue to finance projects, the U.S. market remains oversupplied with turbines, analysts say.

“We’re still not where we were 18 months ago, where we were in a situation where there was plenty of capital but not enough wind turbines,” said Ethan Zindler, head of North American research for London-based New Energy Finance Ltd. “Now that’s absolutely flipped on its head. There is a glut of wind turbines and insufficient capital.”

Vestas has shown some signs of improvement. The parent company’s third-quarter profit jumped 70 percent to $245 million on a 17 percent increase in turbine sales.

But the comparably weaker U.S. market led the company to declare that it is slowing the pace of hiring for its new manufacturing plants in Colorado, where it is investing more than $1 billion and employs 2,500.

Wyrsch said the North American operations are taking a new approach to sales.

In the past, the company targeted sales regionally. Now the targets are on industry categories such as project developers, community-scale wind projects and utilities.

“We have to design and coordinate our sales in a ways that make sense for different types of buyers,” she said.

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