Frederick Post
Even as the use of solar energy to power homes, offices and other buildings increases, the cost of making panels and other equipment is still high in the U.S.
It was that cost that led to the shutdown of manufacturing at BP Solar in Frederick on Friday and the layoffs of 320 employees.
The site, opened in 1981, had once employed more than 500, turning silicon into wafers and then assembling them into solar panels.
The global market has taken its toll, said Reyad Fezzani, BP Solar CEO. The company is moving production to other countries.
"There is a demand for the product all over the world," Fezzani said Friday in a telephone interview from the company's headquarters in California. "We will do that at lower-cost locations, through a range of third-party manufacturers. We have a joint partnership with some in India and China."
The CEO said the decision to end production at the Frederick site, known for a roof filled with solar panels that is visible from I-70, was "very difficult for us. We deeply regret what the decision will have on Frederick employees."
The plant's manufacturing equipment will be sold or decommissioned, Fezzani said.
About 110 employees will remain at the building on Solarex Court, working in sales, marketing, business support, and research and development.
State and federal leaders tried to help BP Solar, but it wasn't enough to overcome market conditions.
Maryland's congressional delegation worked to secure about $11 million in federal stimulus tax credits for BP Solar last year.
But even that was not enough, since the plan was for BP to invest about $22 million as part of the stimulus deal, said Delegate Sue Hecht, a Frederick Democrat who had advocated for the deal.
"What they said last night was when they relooked (at) it, the market had changed so drastically that they just couldn't make it work," Hecht said.
The company will no longer be receiving those credits.
Gov. Martin O'Malley directed state rapid response teams to immediately begin reaching out to laid-off workers.
"While Maryland's unemployment rate remains below the national average, today's announcement is a reminder for all of us that families in our state are not immune from the global economic downturn," O'Malley said.
Employees in Frederick will be given three months' pay and benefits, as well as severance and outplacement benefits.
"Our main concern is for the 320 employees and the city and county's Workforce Services stand ready to help in re-employment," said Richard Griffin, director of the city's Department of Economic Development. "BP Solar has been a long-standing employer in the city, the facility has been a source of pride for the community. I'm hopeful we can retain the R&D center and have a presence in the community."
Laurie Holden, director of Workforce Services, said her staff was prepared, even if a BP Solar employee walked in the door on Friday.
"We have set up six days over the next three weeks to meet with them letting them know how to file for unemployment and our re-employment services," Holden said.
This is the second-largest layoff her office has handled. The biggest was the closure of Alcoa Eastalco Works with more than 600 unemployed workers. Holden said she has already spoken with officials at the Maryland Department of Labor, Licensing and Regulation on potential funding to add temporary personnel to help handle displaced workers.
Bernie Kohn, spokesman for the department, said its Rapid Response Team would be in Frederick for the next three weeks helping BP Solar employees who lost their jobs.
Laurie Boyer, director of the county's Office of Economic Development, said her main concern is also the displaced workers. But she said she understands the economic pressures faced by a global company.
"BP Solar is competing with companies with costs (that are) a lot lower," Boyer said. "I know it was a difficult decision for BP Solar, but I hope it makes the company stronger to compete in the global market. As the market grows, that could mean the company's R&D will grow."
Fezzani said the cost of production is a global issue, not just local, and complimented the city, county and state for their support of BP Solar over the years.
"We shut down plants in Australia and Spain," Fezzani said.
The company's goal is to see more solar energy systems deployed, he said, but to do that the cost has to come down for the consumer. He said the company envisions a 50 percent increase in growth this year, but that is through production at lower cost.
http://www.fredericknewspost.com/sections/news/display.htm?storyid=102978
Top of blog:http://www.usaalternativeenergynow.blogspot.com/
Showing posts with label layoffs. Show all posts
Showing posts with label layoffs. Show all posts
Saturday, March 27, 2010
BP closing Maryland solar manufacturing plant
BP will close its solar-panel manufacturing plant in Frederick, the final step in moving its solar business out of the United States to facilities in China, India and other countries.
Just 3 1/2 years ago, in an announcement widely hailed by Maryland officials and promoters of "green jobs," BP unveiled a $70 million plan to double output at the facility and erected a building to house the production lines.
But on Friday the company said it would lay off 320 workers and keep only a hundred people involved in research, sales and project development. BP said laid-off employees would receive full pay and benefits for three months, followed by severance packages and job-placement assistance. The company, unable to sell or lease the building, will tear it down.
"We remain absolutely committed to solar," BP chief executive Tony Hayward said in an interview Friday. But he said BP was "moving to where we can manufacture cheaply."
The company said in a news release that by closing down high-cost manufacturing locations, BP slashed unit costs by more than 45 percent.
A few years ago, under the leadership of then-chief executive John Browne, BP said that its initials should stand for "beyond petroleum" and that the solar business was a key part of that new image even though it remained a tiny part of the oil and gas giant. Hayward, who came up through the oil-and-gas-exploration side of the company, said BP remains committed to renewable energy where it makes economic sense.
"The bit about 'beyond petroleum' being dead and buried is nonsense," he said. But, he added, "it's a business as opposed to an advertising slogan." He said that "we believe there are real business opportunities" and that BP would "be pursuing them in a far more business-like way than we did when everyone thought we were 'beyond petroleum.' "
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BP, which has been in the solar business for 37 years, acquired a half-interest in the Frederick plant when it bought Amoco Corp. in 1999; it bought the rest from Enron. At one point, BP was the world's second-largest solar company. Today, it ranks in the top 15, though it hopes to grow.
Intense competition and high silicon prices made the solar sector "a very challenging business," Hayward said. Reyad Fezzani, chief executive of BP Solar, said that the U.S. market, which grew 87 percent in 2008, was almost flat in 2009, with prices for solar modules tumbling about 50 percent.
BP also has made missteps. It was producing 125 millimeter multi-crystalline solar cells in Frederick while the rest of the industry had moved to 156 millimeter cells, which have become standard. Changing the production lines would be too expensive, Fezzani said.
Elsewhere in the United States, BP built and then closed two plants using technologies that the company said had showed early promise. "They were very experimental. And those factories weren't successful in making commercial products," Fezzani said.
Anticipating renewed growth in the U.S. market, other companies -- including Yingli Solar of China, Schott Solar of Germany and Kyocera Solar of Japan -- are planning to open facilities in the United States.
But BP plans to rely on a 25-year-old joint venture with Tata in Bangalore, India, and on an eight-year-old joint venture in Xian, China, with a Chinese firm called SunOasis. BP buys silicon from a variety of suppliers and uses contract factories in which it holds no interest. BP Solar said in January that Jabil Circuit would build a module assembly plant in Chihuahua, Mexico, to serve the U.S. market.
BP has applied to the Energy Department to help finance a proposed 32 megawatt solar-power generation plant on Long Island, N.Y., on land belonging to the Energy Department's Brookhaven National Laboratory.
Sensitive to questions about whether U.S. tax dollars would be helping foreign manufacturers, Fezzani said that "70 percent of our jobs are outside the factory," in design, construction, installation and maintenance. He said BP recently certified 150 installers, "all small businesses."
In 2006, a worker interviewed while monitoring the furnaces used to melt silicon at the Federick plant said, "I could retire here." That won't happen now.
"A few years ago conditions were different," Fezzani said. "The margins were healthier. There was a shortage in the market. But since then, the market has changed. We just couldn't make the economics of this factory work."
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032604611.html?wprss=rss_business
Top of blog:http://www.usaalternativeenergynow.blogspot.com/
Just 3 1/2 years ago, in an announcement widely hailed by Maryland officials and promoters of "green jobs," BP unveiled a $70 million plan to double output at the facility and erected a building to house the production lines.
But on Friday the company said it would lay off 320 workers and keep only a hundred people involved in research, sales and project development. BP said laid-off employees would receive full pay and benefits for three months, followed by severance packages and job-placement assistance. The company, unable to sell or lease the building, will tear it down.
"We remain absolutely committed to solar," BP chief executive Tony Hayward said in an interview Friday. But he said BP was "moving to where we can manufacture cheaply."
The company said in a news release that by closing down high-cost manufacturing locations, BP slashed unit costs by more than 45 percent.
A few years ago, under the leadership of then-chief executive John Browne, BP said that its initials should stand for "beyond petroleum" and that the solar business was a key part of that new image even though it remained a tiny part of the oil and gas giant. Hayward, who came up through the oil-and-gas-exploration side of the company, said BP remains committed to renewable energy where it makes economic sense.
"The bit about 'beyond petroleum' being dead and buried is nonsense," he said. But, he added, "it's a business as opposed to an advertising slogan." He said that "we believe there are real business opportunities" and that BP would "be pursuing them in a far more business-like way than we did when everyone thought we were 'beyond petroleum.' "
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BP, which has been in the solar business for 37 years, acquired a half-interest in the Frederick plant when it bought Amoco Corp. in 1999; it bought the rest from Enron. At one point, BP was the world's second-largest solar company. Today, it ranks in the top 15, though it hopes to grow.
Intense competition and high silicon prices made the solar sector "a very challenging business," Hayward said. Reyad Fezzani, chief executive of BP Solar, said that the U.S. market, which grew 87 percent in 2008, was almost flat in 2009, with prices for solar modules tumbling about 50 percent.
BP also has made missteps. It was producing 125 millimeter multi-crystalline solar cells in Frederick while the rest of the industry had moved to 156 millimeter cells, which have become standard. Changing the production lines would be too expensive, Fezzani said.
Elsewhere in the United States, BP built and then closed two plants using technologies that the company said had showed early promise. "They were very experimental. And those factories weren't successful in making commercial products," Fezzani said.
Anticipating renewed growth in the U.S. market, other companies -- including Yingli Solar of China, Schott Solar of Germany and Kyocera Solar of Japan -- are planning to open facilities in the United States.
But BP plans to rely on a 25-year-old joint venture with Tata in Bangalore, India, and on an eight-year-old joint venture in Xian, China, with a Chinese firm called SunOasis. BP buys silicon from a variety of suppliers and uses contract factories in which it holds no interest. BP Solar said in January that Jabil Circuit would build a module assembly plant in Chihuahua, Mexico, to serve the U.S. market.
BP has applied to the Energy Department to help finance a proposed 32 megawatt solar-power generation plant on Long Island, N.Y., on land belonging to the Energy Department's Brookhaven National Laboratory.
Sensitive to questions about whether U.S. tax dollars would be helping foreign manufacturers, Fezzani said that "70 percent of our jobs are outside the factory," in design, construction, installation and maintenance. He said BP recently certified 150 installers, "all small businesses."
In 2006, a worker interviewed while monitoring the furnaces used to melt silicon at the Federick plant said, "I could retire here." That won't happen now.
"A few years ago conditions were different," Fezzani said. "The margins were healthier. There was a shortage in the market. But since then, the market has changed. We just couldn't make the economics of this factory work."
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032604611.html?wprss=rss_business
Top of blog:http://www.usaalternativeenergynow.blogspot.com/
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