Wind:

Dowding Industries' Metts says company can't survive without tax credit extension

Will the wind industry face a devastating blow if Congress does not extend investment and production tax credits? During today's OnPoint, Jeff Metts, president of Dowding Industries, a mid-sized wind component manufacturer, says his company will likely shut down its operations if tax credits are no longer available in 2013. Metts explains why he believes there should be no linkage between Solyndra and the rest of the renewables sector.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Jeff Metts, president of Dowding Industries. Jeff, thanks for coming on the show.

Jeff Metts: Sure.

Monica Trauzzi: Jeff, federal incentives for wind and solar are set to expire soon and Dowding provides components to the wind industry. There's a lot of discussion here in Washington about whether these incentives need to be extended. How concerned are you that we may actually get to a place where they're not being extended?

Jeff Metts: You know, it's a very concerning point. I think that if we could have these -- I don't want to see them for the next 20 years, but if we could have them for five years, we're bringing technology to bear that is going to make this a very competitive energy source and I don't think that we need long to do it. But these are things that government has helped out in the past and made things happen in military applications that eventually cross over into commercial applications. And those are the things that we're seeing now. We just need the chance to get these completed and in line and it takes a few years and people don't understand that. Because you have something, it doesn't necessarily happen tomorrow. For instance, if we buy a piece of equipment or develop one, it takes a year or two to build it. And so I think if we could get a five-year extension on this PTC it would really help. And the other side of it, if we lose it, I'm going to lose people, I'm going to lose a factory. I'm going to lose everything that we really went forward to do in developing latest and greatest technologies that are not seen anywhere else in the world. This is American technology now that's going to bring that type of thinking back here to where it has to be done and it would be a shame to lose that.

Monica Trauzzi: So you're in town talking to lawmakers and staffers on the Hill. What are you hearing and seeing is the biggest disconnect between the discussions that are happening here in Washington and what's happening on the ground?

Jeff Metts: You know, as a manufacturer, there's a huge disconnect because the language you speak here is very different than the language we speak, I want to make parts and everything is kind of wrapped up in a lot of different things. And I don't know that they really understand what technology breakthroughs are happening. I don't think they really understand because we're doing this we're going to get so much more. The only thing I can relate it back to is we went to the moon and got moon dust on our boots and look what we got. Those are technology advances that didn't really -- there was no industry for it to go into yet. And so they developed hundreds of thousands of jobs that didn't have names back then and we are doing those same very types of things in this energy industry.

Monica Trauzzi: You've been asked about Solyndra in these meetings. What is your response? How does Solyndra affect your industry?

Jeff Metts: Well, it's a black eye, which is very difficult to-I don't even really understand Solyndra. We did receive some grants and the scrutiny that we had to go through and go through, we're audited constantly and I don't even know how that could happen, and I don't understand that side of the business. But I don't think that you can take a problem and spread it across an industry. There's problems that arise all the time and I think this is something that's going to be figured out and go on, but there's some great things happening that you don't want to throw the baby out with the bathwater here, because you're going to get something. The United States is going to get something. We're going to get some recognition and some advancements that just are not happening anywhere in the world. And, you know, it's kind of funny, because the government is talking about creating jobs. We're creating jobs. We're giving them what they've asked for and we're creating industry, we're creating new developments and these things are happening now and to eliminate it just does not make any sense to me. And so the Solyndra side of it, I'm sure there's a problem there. You know, I don't understand how much it is or why it is or whatever, but don't put me in that bucket.

Monica Trauzzi: On jobs, we had an interesting discussion before we came on the air today and you were telling me that you're having some trouble actually filling jobs. You have empty spots at your company.

Jeff Metts: I have always had trouble filling jobs. I've hired 100 people since the first of the year and I can hire another 30 today. If I could find them I would hire them. It's all kinds of different reasons of why not. I told you a story, I walked by an interview where guy had a tire on and I hired him because he had a tie on. I mean it's gotten to that point where you just want somebody with the right attitude and the right work ethic to come on and go to work. But I've actually gone to the high schools and the colleges. You know, I own this company and here I'm talking to the high school students telling them that math is important, these things are important to learn. That these jobs are not a button pushing job like it was in the automotive industry. These are thinking, skill jobs and, on that same note, these jobs that we've created in this energy field are the highest paying jobs I have. Everybody wants to go and work in this facility and so they talk about helping the middle class and creating the middle class and re-creating -- this is where you do it. And so these are very skilled jobs that our labor force needs.

Monica Trauzzi: AWEA has reported that the wind industry had a very successful third quarter this year, record numbers. So, why does the industry continue to need incentives from the government then?

Jeff Metts: Well, you know, the reason we got in this is we looked at the technology they were using. It is very antiquated and it needed to be upgraded. And we are taking aircraft-grade technologies and bringing them into the energy field, new materials, new ways of using materials to make, for instance, turbine blades. We'll lighten the turbine blade by 38 percent, we'll strengthen it three times, we'll get more energy out of it and it's just where this industry needs to go. And as you create a market in that industry the entrepreneurs will now come, because that's where they go, is where can I be successful? And by creating these markets we see all types of improvements in process, improvements in technology and it crosses over into all manufacturing. Like we were talking with -- we're building the internal components for blades today. Well, Boeing is approaching us, Airbus is approaching us. These technologies are advancing into new markets that are -- into existing markets that are pretty well known. Caterpillar is approaching us. I mean these are pretty standard companies that now because this would not have happened without this wind industry taking off and doing these things in the alternative, because most industry today is afraid of technology advancements at first. The wind industry needed them. They had to have them and so they welcome them. Well, now they're being seen and so these other companies are saying we can take advantage of these also.

Monica Trauzzi: So bottom line it for us, if these tax incentives are not extended, what will 2013 look like for you?

Jeff Metts: Yeah, I hate to even think about it. We'll close all facilities. I'll lay off over 200 people.

Monica Trauzzi: Completely shut down?

Jeff Metts: I've invested heavily into this. I've put $11 million into this. It needs to be successful and we went into it to be successful. And I don't want somebody to support me for years and years and years, just let me get started. I'll take it from there. We'll be competitive. But the alternative is not something I really want to talk about.

Monica Trauzzi: And there are three types of credits that are up for discussion, the production tax credit, investment tax credit and the 1603 Treasury Grant Program. Is there one that's better than the other or do all three really need to get pushed through?

Jeff Metts: Yeah, I think that if you can help an industry grow, help it. You know, if it's something you're going to have to give a crutch for 40 years, nah, you might want to look at that one. But if somebody is telling you I need something for five years and then I'll take it on my own, we'll create the jobs, we'll bring the technologies, listen to them. This is what we do for a living. I make parts. I know how to improve things. I know how to bring this technology forward. Let me do it. Let me do it, because you're going to lose way too much if I don't.

Monica Trauzzi: OK, we're going to end there. Thank you for coming on the show.

Jeff Metts: Sure, thank you.

Monica Trauzzi: Thanks for watching. We'll see you back here tomorrow.

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