Business

Wind could boost manufacturing in area

Is wind energy a realistic new cluster for Wichita's battered manufacturing sector?

There's a lot of promise and plenty of barriers. At this point, there are mostly just questions.

"We've had tremendous interest from manufacturers," said Randi Tveitaraas Jack, who is heading the Kansas Department of Commerce's effort to create a wind industry.

The commerce department is helping to host a conference this afternoon at the Hyatt Regency Wichita on how local suppliers can get into the wind supply chain. Officials from Siemens and the Great Lakes Wind Network, a network of wind energy subcontractors, will speak.

State officials say they expect a lot of questions. Kansas manufacturers said in a recent survey that their biggest barrier to entering the industry is a sheer lack of knowledge. They didn't know who to talk to or what the original equipment manufacturers (OEMs) want.

Wind energy is a global industry just arriving in the United States. Locals must compete with established European and Chinese suppliers, but they do have an advantage.

The OEMs don't want to keep paying to ship large turbine components from Europe and Asia. They also want to eliminate exchange rate risks.

There is almost no existing U.S. supply chain in place. Kansas has an edge among U.S. manufacturers because of its location close to the best wind farm sites.

State officials caution that it's still a numbers game. If local manufacturers can't make and ship parts for less than their overseas competitors, they can't compete.

"It's not a slam dunk; these guys are smart," said Jeff Tucker, associate director of the Advanced Manufacturing Institute at Kansas State University.

U.S. subcontractors will be more competitive on large components because of the shipping costs, Tucker said.

Officials are hopeful that there is a natural crossover between Wichita's aviation industry and wind energy.

Both industries expect precision. Wind turbines have to last decades and can be incredibly expensive to fix, so reliability is important.

But there are some large issues outstanding, as well:

Size: Commercial-grade turbines are huge and some components require heavy cranes and high ceilings. The heavy investment might dissuade some manufacturers who are set up to make smaller components for aircraft.

Margin: The margins likely will be significantly less than is typical in the aircraft industry because of the established global competition.

Cycle: The city's aircraft industry is interested now, but what happens when the demand for aircraft returns?

It comes down to money, Tucker said. Are local manufacturers willing to spend the money up front to qualify as a wind subcontractor and then stay in the supply chain after the aircraft industry picks back up?

"Qualifying (as a supplier) is intense," Tucker said. "(The OEMs) make an investment and want people who will stay with them."

The OEMs don't want suppliers who are interested only in filling a niche until aircraft picks up, he said.

On the other hand, Tucker said, OEMs don't want their suppliers solely dedicated to their business. A diversified supplier is more likely to stay healthy when the wind business is down.

For now, it's hard to estimate now just how much of an affect wind energy will have on Kansas, but the potential is great.

"It's not often that Kansas gets to pursue an industry that's big, growing and where we have an advantage," Tucker said.

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