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First Solar’s Mesa Factory Delay Will Mean Job Losses

Post Time:Mar 05,2012Classify:Company NewsView:384

 

The move by First Solar Inc.    to delay manufacturing at its planned Mesa facility will mean a loss of jobs, but the city will continue pursuing development near the plant.

First Solar announced Tuesday it would finish the more than $300 million facility near Signal Butte and Elliott roads, but it wouldn’t start manufacturing as planned in 2013.

“It’s obviously disappointing, but we recognize the dynamics of what’s going on right now in that market,” said Mesa MayorScott Smith.

 

The global market for solar hit a wall this year as more capacity came online just as government incentives in prime markets such as Germany and Italy have been scaled back. The result has led to a glut of panels on the market, and led to many companies cutting back.

 

Along with the Mesa delay, Tempe-based First Solar (Nasdaq: FSLR) said it was cutting production at its other plants to about 60 percent to 70 percent of capacity amid alarger fourth-quarter loss. That included idling four of its production lines in Germany and rolling its Malaysian production lines out of service to install new equipment and make upgrades.

While the move means Mesa and the Valley will have to do without the roughly 600 jobs from the plant, Bill Jabjiniak, the city’s economic development director, said he understands the decision.

 

“The First Solar announcement is further evidence of volatility in the solar market, but First Solar is doing it right by not hiring prematurely and then having to lay off,” he said.

The move likely means that suppliers who had planned for First Solar’s opening also will be in limbo. Barry Broome, president and CEO of the Greater Phoenix Economic Council    , which helped lure First Solar to Mesa, said there are suppliers -- including one large glass manufacturer -- that will put their project plans on hold until First Solar starts up its manufacturing process.

 

At the same time, First Solar will finish the facility in May and bring in 130 engineers and administrative personnel who will staff the building, Broome said.

 

“If they were going to discontinue building the plant, that would be disconcerting,” he said.

First Solar has not set a timetable for when the plant would open, saying only it will take improvement in market conditions to get production going. Broome said he believed it could be a couple years before panels were coming out of the factory.

 

First Solar also will not be eligible for the bulk of the incentives that helped lure it to Mesa, as many were based on a state tax credit formula for the number of jobs created and the wages associated with that work.

 

The site did receive about $10 million worth of infrastructure improvements through Mesa, but that was work that would be used to make that area business-ready and won’t go to waste, Broome said.

 

First Solar initially announced nearly a year ago it would build the plant with plans to begin producing panels by the end of 2012.

 

It had pushed that back to 2013 for panel production before eventually just taking it off the board -- at least for the time being.

 

Source: http://www.solarglazingmag.comAuthor: shangyi

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