Ingeteam off to slow start in Milwaukee

Spanish wind and solar power product manufacturer Ingeteam opened a $15 million, 140,000-square-foot plant in the Menomonee Valley in October with the help of state and city funding.

The company received $1.6 million in federal stimulus tax credits, a $500,000 capital financing loan from the state and $4.5 million in state tax credits to locate in Wisconsin.

Ingeteam also has a $2 million forgivable loan from the tax incremental district, said Jeff Fleming, spokesman for the City of Milwaukee’s Department of City Development.

As a condition for receiving the forgivable loan, Ingeteam set an ambitious hiring timeline — 275 employees by 2015.
“They far exceeded their minimum employment of 31 by the end of 2011,” Fleming said. “By the end of 2012, they are required to have 80 employees.”

So far, 51 employees have been hired, said U.S. CEO Aitor Sotes.

Ingeteam’s facility at 3550 W. Canal St. in Milwaukee has a large “now hiring” sign in front and the company has been working to recruit the skilled workers needed for its production lines. But as many other area manufacturers have experienced, there’s a shortage of willing and able industrial workers available.

“We’re trying all we can to hire as many as we can,” Sotes said. “We thought we were going to have more people coming knocking on our doors.”

For example, after many of Frontier Airlines’ Milwaukee-based mechanics were laid off as the airline has dramatically shrunk its Milwaukee presence, Ingeteam targeted them for interviews because of their electrical skill sets. The interviews occurred recently and the company has not decided how many of the former Frontier Airlines mechanics it will hire, Sotes said.

About 12 of the employees who have been hired by the company are currently being trained on Ingeteam production in Spain. Those employees will then train additional workers as they are hired, Sotes said.

The plan is to cross-train manufacturing employees in both electrical assembly for solar power inverters and generator production so workers can be shifted around based on production demand, he said.

While Ingeteam started limited manufacturing of wind turbine generators in December, it has not yet started the planned solar inverter production line. Solar inverters convert the sun’s rays to electric power.

“When it comes to the generator part, we’re still waiting on some of the production equipment to be installed,” Sotes said.
Some generators are being rebuilt at the Milwaukee facility, but new U.S. orders are currently being filled from Spain. Sotes hopes to begin full Milwaukee generator production by June 15.

Part of the delay, Sotes said, is the result of Ingeteam’s high supplier quality standards and comprehensive certification process. The company is still trying to establish a supply chain with the right partners.

Repairing the parts in a wind turbine generator is very expensive — it can cost up to $100,000 to uninstall a generator from a turbine, Sotes said.

“That’s why these babies cannot fail. We want to make sure we’re doing it the right way,” he said. “At the end of the day, since we’re not installers and we’re not in the development business, we value more good access to the supply chain and being in a location close to our clients.”

Ingeteam’s name isn’t well-known in the area yet, since “we are new to the country and new to the city,” which has been a challenge for both hiring and sales, Sotes said. Before, Ingeteam wasn’t successful with potential U.S. customers since it didn’t have any operations here, he said.

“The fact that we have the plant here has opened the door to be introduced (to customers),” Sotes said. “We’ll sell wherever. If they have a postal address, we’ll ship it.”

In addition, Ingeteam will have full service and repair capabilities for U.S. customers. The Spanish headquarters makes products for the rail, marine and hydroenergy markets that will eventually also be introduced here, he said.

“From the corporate standpoint, (solar and wind are) the first step for the rest of our business to come here,” Sotes said.

The company has commitments, but no full orders for its products yet since it doesn’t have the equipment to make them here.

Sotes expects a more solid wave of orders in the second half of the year.

“The wind industry’s not doing that well, but we’re cautiously optimistic,” Sotes said.

As production ramps up, Sotes projects another 99 employees will need to be hired this year.

“It’s impossible to do a copy and paste of our facilities in Spain,” he said. “Before we put anything in place, we want to make sure what we have is something we can put our name behind.”

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