Gamesa to lay off 135 people in India

India contributes 13 per cent to worldwide sales of the global wind power major Gamesa but nevertheless, market compulsions have caused the company to decide to lay off 135 people in India.

The number of people laid off in India is the least globally. In China — which for Gamesa is the only manufacturing hub other than its home country, Spain — as many as 680 people are to be laid off. The most employee reduction is, not surprisingly, happening in Europe, where the company will lay off 1,280 people. In the US, 505 Gamesans will need to look for other jobs.

Gamesa’s action in India is yet another symptom of the tough conditions prevailing in the Indian wind power industry. In wanting to reduce its manpower, Gamesa is in good company — wind turbine manufacturers such as Suzlon and Vestas have also announced manpower reduction. Only, Regen Powertech seems to be bucking the trend and has plans to hire.

Despite the current slowdown in the Indian market, Gamesa, which is one of the top five wind turbine manufacturers in the world, sees India as one of its major markets. In the current year, it sold machines for 210 MW and the sales contributed 13 per cent to its worldwide sales according to information made available by the company. Gamesa has global orders worth 1,578 MW on hand, and India accounts for 16 per cent of it.

Though India is a major market for sales, Gamesa does see it as big enough for integrated manufacture. All the key parts for Gamesa’s turbines are imported, mostly from China. Gamesa says the machines sold in India are 70 per cent indigenised. However, since it counts logistics costs and customs duties in the calculations, the actual value of made-in-India items is less than 70 per cent.

The level of indigenisation is a key data point in the context of an unfolding development. The Government of India is working on a ‘generation-based incentive’ scheme for the wind industry (basically, reviving a similar scheme that existed until March). The GBI is a fixed amount per kWhr produced. There is a call in the industry to provide higher incentives for those who buy machines that have higher local content.