Government agency wins court order to keep CS Wind factory running

HIE have taken the action to ensure that the plant is capable of carrying out work.

And the Scottish Government said it had still to receive a formal response from CS Wind to a letter seeking clarity about their future plans.

But since the HIE action, CS Wind management have been involved in "ongoing discussions" where ministers' concerns have been further highlighted and discussed.

CS Wind used to have 134 staff but workers say it is now being overseen by just six people - as scores have lost their jobs - and union leaders are concerned it is being 'wound down'.

HIE which has taken the action, offloaded a 19% stake in Argyll-based firm Wind Towers (Scotland) that owned the factory, to CS Wind which took over operations in April, 2016.

HIE and Scottish energy firm SSE, which sold its entire 81% stake in WTS said at the time that CS Wind planned to invest up to £14m in Scotland which would safeguard 130 skilled jobs and create up to 70 new jobs in rural Argyll.

HIE papers seen by the Herald reveal that the taxpayer-funded agency gave CS Wind nearly £3m most of which was to create the UK's first offshore wind tower factory.

The agency says conditions attached to the funding require the company to maintain business operations at the plant linked to the purposes for which the funding was awarded. That obligation period runs till March, next year.

An email to energy minister Paul Wheelhouse, seen by the Herald says that an interim interdict was granted at the end of December and served by sheriffs' officers.

The minister has been kept informed by HIE over the legal actions to stop any equipment being removed.

Another interim interdict was agreed in early February by Court of Session judge Lord Ericht.

That stops CS Wind's officers, employees and agents from removing plant or equipment from the factory out of the Highlands and Islands. It was amended to allow the company to deliver items manufactured to satisfy customer orders.

An HIE spokesman said: “We are in regular contact with CS Wind UK, with industry partners and with Scottish and UK governments with a view to maintaining operations at the plant.

“CS Wind has stated that it is working to secure further orders. We have taken formal measures to protect the assets on site to make sure the plant retains its capacity to meet the requirements of any new orders secured.

A £27m investment from Siemens deal paved the way for major expansion at the factory and Mr Wheelhouse (left) and CS Wind Corporation chairman Seong-Gon Gim (right)  attended a ground-breaking ceremony in July, 2016, three months after the takeover.

"We are also exploring the potential for further diversification of the plant that could help sustain its operations and create further employment.”

HIE did not respond to questions about whether anything was written into conditions of the grants that allows the agency to claim the money back if the company stopped operating.

Pat Rafferty, Unite Scottish secretary was shocked by developments, saying: "The situation at CS Wind is perilous.

"The fact that an injunction has been taken out against the company is unheard of and highlights the major concerns which governmental bodies hold regarding the intentions of CS Wind.

"The factory should be one of the crown jewels in Scotland's renewables industry as it manufactures onshore and offshore wind turbines but it has been lying idle for months now.

"It's time the owners of CS Wind moved on to other shores in order to allow alternative ownership options to come forward including forms of public ownership so that we can work towards guaranteeing the factory a successful future."

Minutes of an HIE board meeting from February, 2017 reveal that just ten months after the CS Wind takeover they were told that 63 jobs were at risk.

And in 2018, HIE said a £2.8m extension and alteration of the factory leased to CS Wind "will increase the company’s competitiveness when bidding for offshore wind contracts".

At a ceremony attended by CS Wind chairman Seong-Gon Kim in July, 2016 to mark the expansion plan and the announcement of a major Siemens contract, Mr Wheelhouse said: "It is a tremendous testament to the work of Highlands and Islands Enterprise and others that we have managed to achieve investment from CS Wind UK in this plant and hopefully it is a bright future for all that work here."

The concerns in Scotland echo worries raised in Canada about the mothballing of a factory after the wind turbine manufacturer opened in Windsor in 2011 as part of a multi-million dollar deal with Ontario’s Feed-In Tariff program for renewable energy sources. CS Wind was expected to hire around 400 people when it first opened. As of 2015, it employed 482 people.

It started winding down production six years after promising jobs and economic investment with $10-million publicly funded incentives.

Some workers at CS Wind were laid off in 2018, and last year, it was reported that there was no activity on site.

In July, last year the turbine plant was sold for $12m with no activity at the plant for several months and with all employees laid off.

A CS Wind UK production video from 2016

In October, it was revealed that the Scottish base faced the loss of 73 jobs amongst its 94 employees while recording pre-tax profits the previous year of £7.1 million in 2018. The 2018 annual report had looked forward to a "positive" next financial year "with a further increase in production volume expected"

Director Yun-Cheol Kim said in his assessment: "The UK is unquestionably an attractive place to do business in renewables. The industry continues to enjoy consistently high levels of public support with offshore wind expected to take the lead in renewables between now and 2020."

Nobody at CS Wind in the UK or at its South Korea head office were returning calls or emails from the Herald over a period of over a week. An official email address for the Highlands factory is no longer working and all calls consistently go to answerphone.

HIE say only £190,000 was drawn down from the £1.5m training grant.

The CS Wind development comes as concerns were raised that Scotland's forecast of a jobs bonanza from the offshore wind farm revolution are "a pipe dream" as it emerged it has created just 6% of the 28,000 direct jobs predicted by this year.

New official estimates state that there were just 1,700 full-time jobs in the offshore wind sector in Scotland, a fraction of the numbers projected by ministers by 2020.

The Scottish Government's low carbon strategy published in 2010 which described the large scale development of offshore wind as representing the "biggest opportunity for sustainable economic growth in Scotland for a generation" with Scotland having an estimated 25% of Europe's offshore wind potential It said there was a potential for the creation of 28,000 direct jobs and £7.1 billion investment by 2020.

It comes as concerns remain over Scotland losing out on multi-million pound contracts for Scotland 's wind farm revolution - after a ministerial summit convened to end the "scandal" of Scots green jobs going abroad promised action.

In December, the First Minister was urged to intervene amid concerns Scotland is missing out on a wind farm jobs boom, as CS Wind lost out on a key contract.

A circular message from CS Wind revealed at the time that hopes of preventing the axing of 80% of the staff remain slim, while it also confirmed it had lost vital work on a Scottish wind farm.

The update - signed off by Mr Kim - confirmed that a major project to deliver towers for the Beinn an Tuirc wind farm would “no longer” be manufactured at CS Wind’s UK factory.

CS Wind were involved in the Beinn an Tuirc wind farm project on the Kintyre peninsula believed to consist of 18 turbines.

In November, ScottishPower Renewables, announced that it had begun work on the Amazon backed project which was to see 50MW of green energy, enough each year to power the equivalent of 46,000 homes.

ScottishPower had then stated the project would be powered by turbines supplied by Danish-owned Vestas, with the towers for the wind turbines being supplied by CS Wind.

Up to a hundred new jobs were expected to be created at the site over the lifetime of the project and it was announced CS Wind were on board.

Unite believe CS Wind lost the Beinn an Tuirc contract due to the uncertainty surrounding the factory. It was believed the contract would have provided the factory with a two months of work until other contracts could be secured.

HIE put out this video of the ground-breaking ceremony for a 2016 major expansion attended by Mr Wheelhouse and CS Wind Corporation chairman Seong-Gon Gim. It came as Siemens awarded CS Wind UK preferred supplier status for multiple offshore wind tower projects.

Staff at CS Wind were told in December that many meetings with Government officials, Highlands and Islands Enterprise, and union leaders have “not given us any positive outcomes so far”.

Mr Kim said in the circular: "Despite all efforts to date, there remains a significant high risk of redundancies of around 80% of the workforce at all levels. Currently it is expected that approximately 20% of employees will be retained to complete our contractual obligations."

A Scottish Government spokesman said: “Our priority remains to support the company in its attempts to secure future work for the site, with HIE meeting with local management on a regular basis to discuss all options. 

“We continue to provide support through our Partnership Action for Continuing Employment (PACE) initiative to all of those affected by the redundancies at the facility.

“Following on from the Campbeltown economic summit meeting held in November, the Rural Economy Secretary hosted the first working group meeting in Campbeltown earlier this week, bringing together local employers, the Scottish Government and our agencies to identify economic opportunities for the area. Dialogue with local partners continues to ensure everything is being done to support the people of the Kintyre peninsula.  

“Renewable energy is a crucial element of our transition to deliver a low-carbon economy and this is why we convened the second offshore wind summit with our agencies, UK Government officials, Scottish Offshore Wind Energy Council, unions, developers, tier 1 contractors and Scottish Renewables to identify urgent actions to support the supply chain to secure further contracts for offshore wind projects.

“Many of the key policy instruments remain controlled by UK Ministers, we welcome UK Government’s consultation on proposed amendments to the Contract for Difference (CfD) auction process,  which provides a real opportunity to implement change and encourage value added to the Scottish and UK economies and to secure wider and more meaningful use of the Scottish and UK supply chains.”