Wednesday, May 25, 2011

Solar Product Manufacturer to Lay Off 300 Employees

Solar energy products manufacturer Energy Conversion Devices Inc. said last Tuesday it will lay off 300 workers, including 115 in Michigan, as it restructures amid cutbacks in government incentives overseas and after posting a large quarterly loss.

Recent solar incentive policy changes in Italy and France hit Energy Conversion Devices harder than some competitors because it more heavily relies on sales from those markets, said Adam Krop, a senior solar analyst with New York City-based Ardour Capital Investments.

"On top of that, their technology, from a cost basis, is not as competitive as (that of) some of its other competitors from China," he said.

Slightly more than half of the 115 layoffs during the next week will occur in Metro Detroit, with other job losses coming from the firm's global locations, said Michael Schostak, head of investor relations for the Auburn Hills-based company. The plan to reduce its 1,600 workers by about 20 percent comes after the company shed 470 workers in 2009.

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

The company, which makes, sells and installs flexible, thin-film solar products and systems to the building and rooftop markets, has facilities in Rochester Hills, Troy and Greenville in the state and a plant in Tijuana, Mexico.

It also has sales offices in Paris; Verona, Italy; and Mainz, Germany.

On Tuesday, the company announced it lost $243.2 million, or $4.88 a share, in the January-to-March quarter and named a new interim president as it implements a corporate restructuring that will save an estimated $20 million annually.

Energy Conversion Devices' board named Jay Knoll, executive vice president, general counsel and chief administrative officer, as interim president and has initiated a search for a permanent CEO.

Knoll replaces former president and CEO Mark Morelli, who resigned effective Friday.

Morelli had led the company since Sept. 1, 2007, replacing former General Motors Chairman and CEO Robert Stempel, who died Saturday.

Knoll said ECD plans to improve its North American business and grow in markets such as India and China, after experiencing delays in projects and orders as solar incentives changed in key markets such as France and Italy.

"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 in a statement.

"Our restructuring actions are designed to align our business with these new realities in the solar industry."

ECD's subsidiary United Solar plans in August to open a manufacturing plant in LaSalle, Ontario, adjacent to Windsor.

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 during the analyst call.

ECD's stock, traded on the Nasdaq under the ENER symbol, closed down 25 cents or 14.3 percent Tuesday at $1.50 a share.


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