US maker of generators sees demand surge in wake of hurricanes
(Reuters) - The hurricanes that have devastated parts of the U.S. this year are creating hundreds of new jobs at Generac Power Systems' expanding network of factories in Wisconsin and South Carolina.
"We've been looking to add 400 people," Generac CEO Aaron Jagdfeld said in an interview with Reuters.
Generac first stepped up hiring after Hurricane Beryl, which ripped through Texas earlier this year, and has continued adding staff through the double-punch of Hurricanes Helene and Milton in recent weeks.
Big storms typically create a burst of new business for the Waukesha, Wisconsin-based company, which builds portable and so-called standby generators, designed to be permanently fixed to a structure and switched on automatically whenever there's a power outage. Jagdfeld estimates each major storm brings in an incremental $50 million to $100 million in sales.
"There's going to be a surge over the next six, 12, 18 months in residential standby units," he said. "Those will be very popular in Florida, Georgia, South Carolina, Texas - all the storm-impacted areas."
Jagdfeld said each sales boom typically is followed a bust that brings the business back down, but it settles at a higher level than before.
"We call it a step-function business, because we grow in steps," he said. "And we see our business continuing to grow this way," because climate change is bringing more powerful and frequent storms, and the quality of the U.S. power system continues to deteriorate.
Changing consumer habits also help fuel demand. More U.S. consumers rely on medications that require refrigeration and use electronic devices for communication that can be drained and become useless in a prolonged outage.
Investors have taken note of the company's expansion alongside the storms. Shares of Generac Holdings, the parent company of Generac Power Systems, closed at more than a two-year high last week. The company will report third-quarter earnings on Oct. 31.
Generac gauges power "quality" by the number of hours of outages seen each year, a measure it's tracked since 2010. The U.S. saw 1.2 billion outage hours in the first nine months of this year, Jagdfeld said, the worst showing since the company started tracking it.
Jagdfeld said the 400 workers the company is looking to add are mostly for production jobs, which previously accounted for about 5,000 of Generac's 9,000 employees.
The company is also building new factories. It opened a new plant in South Carolina three years ago to build standby generators for residential users and has a plant under construction in Wisconsin to build large commercial and industrial generators.
Hurricane Helene damaged Generac's plant in South Carolina, tearing off sections of the roof and flooding parts of the plant. Power was down for five days.
"We struggled to get people back into the factory," said Jagdfeld, noting that some workers lacked power for 10 days or faced other personal challenges that kept them away from their jobs. The company was able to compensate for the lost production by stepping up output at its other standby generator factory in Wisconsin.
(Reporting by Timothy Aeppel; Editing by Paul Simao)
