Mitsubishi Fort Smith Factory Opening Remains A Mystery

Legislation was defeated Tuesday (Mar. 13) in the U.S. Senate that could have had an impact on Mitsubishi’s decision to operate its new but idle wind-turbine manufacturing plant in Fort Smith.

Also, Mitsubishi recently lost part of its legal dispute against General Electric. A jury verdict and subsequent U.S. Federal Court decision requires Mitsubishi to pay GE $170 million in damages resulting from a wind-turbine patent dispute.

SENATE ACTION
Senate amendment 1812, proposed by U.S. Sen. Debbie Stabenow, D-Mich., would extend to January 2014 a production tax credit designed to encourage more U.S. wind energy development. 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.

U.S. Sen. Mark Pryor, D-Ark., voted for the amendment, while U.S. Sen. John Boozman, R-Ark., voted against it. Voting was primarily along party lines, with only four Democrats voting against the amendment and no Republicans voting for it. The amendment is tied to S. 1813, the major legislation addressing future surface transportation priorities and funding.

Boozman’s office said he voted for a similar amendment in which the tax credit was paid for instead of supporting Stabenow’s amendment which was not. An office statement also noted that Boozman voted against an amendment “that would have stripped all alternative and renewable energy tax credits.”

“Senator Boozman voted for a way to decrease our energy dependence while not increasing our national debt,” noted Boozman spokeswoman Sara Lasure.

MITSUBISHI ISSUES
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 would delay the opening of the Chaffee Crossing plant. Mitsubishi officials have previously said a PTC extension does not factor into when or if they will operate the newly constructed Fort Smith plant.

Mitsubishi has backtracked on a statement from a “mid-level manager” in which the manager said approval of the PTC would result in activity of Mitsubishi’s Fort Smith plant.

“We need a market to operate our factory. Right now, the market is not so good. We have a site but cannot operate it,” Yoshinori Ueda, assistant general manager of MHI’s wind turbine business said in this report at Recharge News. “If we have the PTC, we will go ahead.”

Or maybe not.

Mitsubishi spokeswoman Sonia Williams said Tuesday that Ueda was not speaking for the company.

“I have informed Recharge News that the statements made by Yoshinori Ueda do not reflect Mitsubishi’s position and are his personal opinion. Mr. Ueda’s remarks should not be confused with the intent of Mitsubishi. I also requested that Recharge News issue a clarification to reflect Mitsubishi’s position,” Williams noted in an e-mail to The City Wire. “Mr. Ueda, a mid-level manager at MHI, also issued an apology to Recharge News for creating such confusion.”

In his apology, Ueda noted that he is “not privy to the strategic decisions and significant information that guide Mitsubishi.”

COURT RULING
The federal jury in Dallas ruled recently that Mitsubishi had infringed on a patent involving “zero voltage ride through” (ZVRT) technology. The system keeps a turbine connected to the electric grid when voltage drops to zero.

“GE firmly believes that protecting our intellectual property rights is the foundation for innovation, investing in high technology industries and creating high value jobs,” Chet Lasell, a spokesman for GE’s Power and Water unit, said in this report from Recharge News last week. “This is certainly true in the wind industry, which holds the hope and the potential for a cleaner energy future.”

But the jury dismissed a GE claim that Mitsubishi infringed on a patent related to the fundamental design of a wind turbine.

“While the Court had already dismissed one GE patent as being invalid, we are obviously disappointed by the verdict on another patent — the ‘705 patent — rendered by this Dallas, Texas jury,” Williams noted on behalf of Mitsubishi. “Nevertheless, it is important to see this case within the larger context: as part of a GE litigation strategy that would stifle competition and innovation in wind turbine technology.”

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].