European incentive cutbacks cause layoffs at US solar firm

Energy Conversion Devices Inc., a solar energy products manufacturer based in the US state of Michigan, will lay off 300 workers as a result of incentive cutbacks in Europe and increased competition from China.
European incentive cutbacks cause layoffs at US solar firm

In a conference call with analysts on Tuesday, the company, which manufactures flexible, thin-film solar products and systems to the building and rooftop markets, said the cuts will impact its three plants in the US, a plant in Tijuana, Mexico, and its sales offices in Paris, France, Verona, Italy and Mainz, Germany.

Nearly two-thirds of the job cuts will be outside of the US, the company said.

According to industry analysts, Energy Conversion Devices has been harder hit than some of its competitors by recent solar energy incentive policy changes in Italy and France because it relies more heavily on sales from those markets.

At the same time, analysts said, Energy Conversion Devices has been losing out in the marketplace to Chinese competitors selling less expensive technology.

During the call, Chief Financial Officer William C. Andrews said layoffs will happen at all locations and all levels of the organization.

Over the past year, Energy Conversion Devices has lost about $243.2 million, according to published reports. A corporate restructuring will save the company $20 million a year, Andrews said.

Energy Conversion Devices’ new interim president, Jay Knoll, said during the analyst call that the company will seek to bolster its North American business and grow in markets such as India and China.

"The abrupt shifts in European solar policies are having a profound impact on the outlook for the global solar industry and our business," Knoll said. "Our restructuring actions are designed to align our business with these new realities in the solar industry."

In the meantime, United Solar, a subsidiary of the company, is moving ahead with plans to open a manufacturing plant in LaSalle, Ontario (Canada) in August.

Knoll said Ontario has a "robust" solar incentive program.

"We believe this can be an important growth opportunity for us over the next several years," he said.

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Energy Conversion Devices Inc.

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