March 25, 2010 Newsletter

What OEMs Are Saying...

Supply chain managers from five wind turbine OEMs came together on a panel at AWEA's Supply Chain Conference in Greensboro, NC to answer questions from the audience. Companies represented included Clipper Windpower, Nordex, REpower, Gamesa, and Arreva. GLWN's Patrick Fullenkamp and Dale Reckman took the following notes:

What's your outlook for the next 6 months?

• The market contracted in 2009 with order intake taking a big hit.
• Lots of orders are waiting on finance, but that's starting to come back now.
• Working on lowering working capital in 2010, burning off inventory.

Is the wind industry a lot like automotive?

• Wind is more dependent on supply chain than auto because the cost of quality is so high and more urgent.
• In this industry, availability is everything.
• It's a blend of three: blades with aerospace, nacelle to automotive, towers to steel.

How do U.S. suppliers compare with those in Europe?

• It is on a case-by-case basis.
• U.S. suppliers are improving in quality although not to European levels. Europe has been doing it longer.

How important is finding domestic suppliers?

• I have a personal 90% sourcing goal.
• We brought over a lot of European suppliers who have JV'd with American partners.
• We were 50% this year. In a global market, everyone needs to be globally competitive and embrace the challenges.

What are the biggest supply chain challenges?

• Large castings and large forgings.
• For us the choke point is now operations and maintenance.
• Very large parts with specific processes and procedures.

What is the chance of a small company (under 100 employees) to get business?

• We're looking for lower overhead companies.
• Our (turbine) company is smaller than our competitors and is looking for suppliers that are similar sized to ours.
• At our last two supplier forums, small companies were named suppliers of the year.

Changes in the WIND:
A Note from GLWN's Director

In 2007, Great Lakes WIND Network was started by WIRE-Net to help manufacturing-related companies take advantage of a market with double-digit annual growth rates: a phenomenon this region hasn't experienced in decades!

Today GLWN is global. This nonprofit organization is an industry-led organization of manufacturers and suppliers whose mission is to increase the domestic content of North America's wind turbines and to grow the supply chain for the wind industry.

Since our founding over 1,500 companies throughout the U.S., Canada, and Mexico have joined, and the GLWN team has worked full-time on your behalf. We have already made hundreds of quality referrals using the company profile and assessment process we developed and continue to refine. Our daily work in the trenches among buyers and sellers, industry government and global leaders, enables us to bring you market intelligence, potential new customers, and tools for making direct connections.

Last summer, we created www.glwn.org, a unique interactive GIS map to speed up the "connecting" process. Now sources around the globe regularly tap into our site, and over 2000 hotlinks are delivered to your websites each month. GLWN is all about new business development. We're pleased to be an important part of your Wind Team.

I'm often asked by companies, "Where do you get the money to do all this?"

The short answer:

1. The start-up funds for GLWN came from grants made by charitable foundations
2. The initial funds to launch the GIS website were provided by the State of Ohio
3. The cost of delivering technical services and support to companies is covered by workshop, attendance, and onsite service fees

As we look toward the future and the prospects for wind energy across North America—we're bullish.

Over the next 20 years, turbine installations will continue to drive demand for thousands of new components, blades, and towers sets, and create the need for siting, engineering, construction, and installation services. We know that the U.S. already has over 30,000 utility-grade wind turbines powering the grid. Each of them demands on-going maintenance. When you factor in a 20-year service life and add another 5,000 per year coming off warranty, you've got a fascinating growth opportunity for companies seeking diversification.

This propelled GLWN to make a major new investment to support your participation and growth exceptional market. Check out our new GIS Map. There you'll find:

• Many more categories and resources now serving the entire wind supply chain, from Siting to Service
• A new "Google-like" search capability to quickly search by keyword
• A new link to your website, beginning with a member page that features your marketing pitch, wind capabilities, and key contacts. This capability is designed to make it easier and faster for you to seek and be found by new business contacts

Obviously, this upgrade to our GIS map was a considerable investment, but we think your company's future and the promise for this market well worth the effort and expense. In return, I'm asking for your support, so that GLWN can continue to grow along with you and the wind industry. Beginning this month, we will offer GLWN memberships for as low as $500 per year.

In addition to a place on the GIS map, your membership will include your newsletter, access to coaching support, technical assistance, and an industry database with thousands of contacts. You will receive an invitation to our GLWN Members-only OEM Summit during which you will be able to talk with many of the same turbine supply chain people attempt to meet at conferences and try to reach by phone or email.

To make the process easy, you will be able to make both your initial GLWN membership and subsequent annual renewal payments by credit card.

I hope that when we contact you, you'll invest in GLWN as we're investing in you and your future growth in the wind industry.

Thank you.

Ed Weston, Director

GLWN Special Membership Opportunity

We expect upwards of 20,000 people at WINDPOWER® 2010.

How do you plan to increase your company's visibility?
Maximize your time and energy?
Leverage your financial investment?

Join GLWN! In the GLWN booth at WINDPOWER 2010 our Gigawatt Level Members will benefit from:

• The increased company recognition that will come from the 10 second slideshow we will play in a continuous loop on a 42” flat screen monitor
• The ability to display company literature
• The ability to have another place meet and greet customers and suppliers
• The opportunity for more networking time and the potential to make new connections through other GLWN Members
• The onsite support provided by your GLWN Team

Join GLWN before May 15th to take full advantage of your GLWN membership and your participation at this year's show.

For additional information contact Pamela Holmes at 216.588.1440, ext. 104.

GLWN Workshops Expanding

GLWN continues to travel around the country educating companies interested in entering the supply chain. So far this year the team has been to Kansas, Nebraska, and even Niagara, Ontario, but that's just the beginning. This spring, GLWN will conduct several workshops in Ohio, Oklahoma, and South Dakota.

Not only is GLWN growing its geographic footprint, we're also expanding the topics of our workshops. In addition to the basic and advanced workshops for manufacturers looking to make component parts for utility-grade wind turbines, GLWN is teaming up with the National Renewable Energy Laboratory (NREL) to cover the midsize wind turbine industry at two upcoming workshops. Look for GLWN to soon begin exploring other aspects of the supply chain, including operations, maintenance, construction, and logistics.

Information on where GLWN will be presenting can always be found on our website or check out the left column of this and every newsletter.