[CTC] Background on House 'Currency Reform for Fair Trade Act' (96 Cosponsors)

[Andrew Gussert]

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032604611.html


BP closing Maryland solar manufacturing plant


 
  
   
  
  
   
  
 


By Steven Mufson

Washington Post Staff Writer 

Saturday, March 27, 2010 

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.'
"


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

 		 	   		  
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