First Quarter Mitsubishi Jobs Still Doubtful In Fort Smith

The opening of Mitsubishi’s large manufacturing operation at Chaffee Crossing near Fort Smith continues to be under review, with the legal issues delaying the plant’s opening on a slow path through the courts.

Also, a Mitsubishi spokeswoman says the plant’s opening will not hinge upon the extension of a federal tax credit for wind energy production.

Mitsubishi Power Systems Americas (MPSA) announced Oct. 16, 2009, plans to build a $100 million, 200,000-square foot wind turbine manufacturing plant on 90 acres at Fort Chaffee. Construction is finished on the plant. The plant could employ up to 400 once fully operational, and Mitsubishi officials initially said full production and the 400 jobs could be in place within the first quarter of 2012.

But by December 2009 it was learned that legal and trade disputes between Mitsubishi and General Electric could delay the Chaffee Crossing project.

“Mitsubishi is still waiting for a decision by the U.S. Court of Appeals for the Federal Circuit and is working to bring a second GE lawsuit to conclusion in Dallas. These suits have seriously hampered Mitsubishi’s marketing efforts,” Mitsubishi spokeswoman Sonia Williams recently told The City Wire. “Despite GE’s prolonged and meritless lawsuits, Mitsubishi continues to diligently pursue opportunities to market and sell its variable speed wind turbines in the US. As a result, the production start date continues to be under review.”

Williams said a U.S. Court of Appeals decision is pending. Also, she said discovery is almost completed in Dallas court case, with a trial scheduled for late February.

The American Wind Energy Association has said not extending a federal tax credit for the wind energy industry could result in thousands of lost jobs. The Production Tax Credit (PTC) establishes an income tax credit of 2.2 cents per kilowatt hour of energy produced by utility-scale wind turbines. The credit was first established in 1992, and is set to expire at the end of 2012.

“With the threat of the PTC’s expiration, wind project developers are not making plans in the U.S. and American manufacturers are not receiving orders. Job layoffs have started already,” noted a statement issued Dec. 12 from the AWEA. “The wind industry is facing the recurrence of the boom-bust cycle it has seen in previous years when the PTC was allowed to expire. In the years following expiration, installations dropped between 73 and 93%, with corresponding job losses.”

The AWEA says the wind energy will create 100,000 American jobs in the next four years, and grow the wind manufacturing sector by 33% to 46,000 manufacturing jobs.

However, the credit is not a factor in Mitsubishi’s decision about its Fort Smith operation.

“No, Mitsubishi’s review of a production start date is not dependent on the resolution of the U.S. production tax credits issue,” Williams said.

Michael Tilley with our content partner, The City Wire, is the author of this report. He can be reached by e-mail at [email protected].