Evergreen Solar to close plant cutting 800 jobs
DEVENS, MASSACHUSETTS - U.S. solar company Evergreen Solar Inc said it would close its Devens, Massachusetts factory and cut 800 jobs to preserve cash as its products face stiff competition from cheaper Chinese rivals.
Evergreen shares fell more than 3 percent in extended trade following the announcement.
The facility, which began producing solar panels in 2008, will shut down by the end of the first quarter, Marlboro, Massachusetts-based Evergreen said.
Evergreen has struggled to compete with lower-cost Chinese panel makers even though its production costs at the Devens plant are lower than those of most Western manufacturers.
Last month, the company announced a major debt-restructuring plan aimed at guaranteeing its survival.
However, Evergreen Chief Executive Michael El-Hillow said increases in solar panel production in low-cost regions such as China combined with reductions in government subsidies in key European markets would pressure prices throughout this year. Evergreen's average selling prices dropped 10 percent in December.
"The United States will continue to be at a disadvantage from a manufacturing standpoint," El-Hillow said in a statement.
Evergreen will record non-cash charges in the fourth and first quarters of $340 million to write off the building and its equipment. It is also reviewing $150 million of prepayments associated with silicon contracts to determine whether additional charges are required.
Evergreen began shipping solar panels from the Devens facility 2008 and at the time planned an aggressive expansion of the plant. The company had received generous incentives from the state of Massachusetts to open the facility.
The global financial crisis and recession, however, put the brakes on expansion plans for Devens as solar panel prices dropped and financing for solar projects dried up.
Instead, Evergreen pursued a strategy to outsource solar work to China. It moved panel assembly from Devens to China but continued to make wafers and cells in Massachusetts.
Evergreen's string ribbon silicon wafers use half the polysilicon of traditional products, but are still sold at a premium to peers.
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