Sanyo plans to layoff 140 employees in California

Japanese solar company Sanyo plans to lay off about 140 employees in California, or about 40 percent of its manufacturing workforce in the United States, as it shifts its strategy in order to compete with large rivals, particularly those from China.

Sanyo is closing the 30-megawatt factory in Carson that makes silicon ingot and wafers – the materials for making solar cells – after setting up shop there in 2003. Production will stop at the end of March to coincide with the end of the company’s fiscal year, said Aaron Fowles, a Sanyo spokesman, on Friday. The company plans to liquidate the assets and close the factory for good in October.

The company has another, 70-megawatt ingot and wafer factory, located in Salem, Ore., and that factory will continue to operate, Fowles said.

The Carson factory has aging equipment that is making products that aren’t so in demand anymore, he said. And the cost of retrofitting it with new equipment is too high, especially when the company has to compete with the growing presence and influence of Chinese manufacturers, he added.

“The Carson plant has no room for expansion, and it will take a vast amount of investments to bring it up to speed,” Fowles said. “To be competitive, we can do it in Malaysia.”

The company, which is part of Panasonic, is buiding a large factory in Malaysia that will make wafers and turn them into solar cells and then panels. Panasonic plans to invest 45 billion yen (about $580 million) in the new factory. A fellow manufacturer in Japan, Sumco, announced Friday it would get out of the business of making silicon wafers all together.

The planned factory shutdown by Sanyo follows a series of layoffs and solar factory closures in the United States and elsewhere over the past year. Manufacturers have struggled to survive when there is a glut of solar panels and the wholesale prices for them have fallen by 40-50 percent. The glut is partly caused by the lowering of government subsidies in big solar markets such as Germany and Italy in 2011.

Earlier this month, California-based Amonix said it was letting go 200 of the roughly 300 workers at its North Las Vegas factory, which it opened last year with a promise to bring lots of local jobs. Amonix said it needed to cut staff so that it could modify the production equipment and start making a new line of solar energy systems later this year. Some workers there told the Las Vegas Sun that they didn’t know their employment would be so temporary.

Also earlier this month, Boston-based Satcon Technology, which makes power conversion equipment for solar electric systems, said it was laying off 35 percent of its workforce and shutting down a factory in Canada. Two German manufacturers who set up factories in the United States, SolarWorld and Solon, have shuttered some of the production here.

Several manufacturers who didn’t have enough money or unable to reduce their costs quick enough to stay in business have filed for bankruptcies, including Solyndra, SpectraWatt and Evergreen Solar.

Some manufacturers blame their Chinese rivals for the pileup of unused solar panels and the big drop in prices. SolarWorld, which runs a solar panel factory in Oregon, joined six other manufacturers in filing a trade complaint with the U.S. International Trade Commission and the U.S. Department of Commerce last October. The companies contend that Chinese manufactures are selling their products at prices far below the cost of producing them, and they are able to do that because they receive heavy and unfair subsidies from the Chinese government.

But many project developers and installers see things differently. They have benefited from the lower prices, and they want to drive down the cost of producing solar electricity so that solar can better compete with power from coal and natural gas power plants.

Source: Forbes