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Case Study: The World In Motion Wind Turbine Company, 20081 - page 3 / 11

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Source: (http://www.wwindea.org/home/index2.php?option=com_jce&task=popup&img=images/stories/ pdfs/marketshares2006.jpg&title=&w=591&h=412&mode=0&print=0&click=0 )

Industry Situation: Consolidation and Capacity Constraints

Consolidation is a constant among wind turbine manufacturers seeking to gain scale and to vertically integrate: just in 2006 and 2007, Siemens acquired Flender and Robicon, and Suzlon acquired RePower and Hansen Transmission. Suzlon claims to be the most vertically integrated of the major wind turbine manufacturers in the industry, a response to shortages of critical components. Items that are especially in short supply include bearings and gearboxes. These components for wind turbines compete for manufacturing capacity with mining and other heavy industries, even though the components may not be interchangeable. Sometimes it seems as if there is a gold rush to set up wind turbine manufacturing in Iowa and surrounding states. The attraction is proximity to the strongest concentrated wind resources in the mid-U.S. (http://www.awea.org/newsroom/pdf/Top_20_States_with_Wind_Energy_Potential.pdf ) with empty factory space and rail spurs near shipping on the Mississippi and Missouri Rivers and interstate highway routes, coupled with low labor wage rates (approximately $16 to $22/hour plus benefits for skilled factory workers laid off from other industries). Jackson found out after he started work that even experienced procurement specialists made about the same income as

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