Solar Job and Production Cuts
Abound Solar and First Solar Losses
Solar companies are still struggling against Chinese competition, and the strain is hurting.
Abound Solar, a Loveland, Colorado-based company that makes thin-film cadmium telluride solar modules, announced a temporary halt of first-generation models while it focuses on a new generation.
This suspension will lead to a layoff of around 180 permanent employees and approximately an additional 100 temporary employees.
The 180 laid-off employees make up a large portion of Abound’s 400-person employment force. They have received severance packages for their leave.
But Chief Financial Officer Steve Abely said the company hopes to rehire these employees after six to nine months, once things have been restructured for the production of the new generation of modules.
The new modules will have 12.5% efficiency, compared with the first generation’s 10.5% efficiency. The improvement will allow Abound to better compete with Chinese solar companies.
Abound was granted $400 million in loan guarantees in 2010, loans that would help the company create 1,500 jobs in Colorado and Indiana.
But so far, the company has only used about $70 million and is instead cutting jobs.
CEO Craig Witsoe had words of encouragement:
“While this is a difficult move with regards to temporarily reducing our workforce, we know that accelerating the introduction of our next generation module will bring significant benefits to our customers and allow us to create even more jobs in the future.”
U.S. solar companies are competing with low pricing and high manufacturing rates from Chinese solar companies, which received $30 billion in subsidies form the government in 2010.
And even the top U.S. players are feeling the effects.
First Solar (NASDAQ: FSLR) has reported a net loss of $413.1 million, or $4.78 per share, in the fourth quarter of 2011.
Shares dropped 10.58% on Tuesday morning to $32.58, and analysts fear they will fall even more. Aaron Chew of Maxim Group said:
“It’s pretty disconcerting. After today, you have to wonder if [the shares] are going to trade down toward the $20s.”
The company has been taking hard hits all year, performing worst on the S&P 500 Index in 2011.
First Solar will make moves to improve panel efficiency, like Abound, and the company also plans to reduce production to between 60% and 70% rather than the December levels of 80%.
That’s all for now,