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More solar woes: SolarWorld shuts California plant, cuts workforce

More solar woes: SolarWorld shuts California plant, cuts workforce

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SolarWorld is the latest company forced to cut costs any which way it can to remain competitive in an industry grappling with falling solar prices and a supply glut.

SolarWorld announced Friday it will close its California solar module assembly factory and an older production line in Germany in an effort to cut costs and remain competitive. Such is life in a quickly consolidating solar industry grappling with a particularly sticky challenge: sales are up in many cases, but prices are falling even faster with a consequent drag on profits.

SolarWorld said in a statement it will shift its U.S. production to its bigger plant in Hillsboro, Oregon. The company makes wafers, turns them into solar cells and eventually into a solar panel. SolarWorld also sells, distributes and installs its solar panels.

SolarWorld will lay off 186 workers or about 62 percent from its California plant, the Ventura County Star reported.  The company will expand its sales and distribution businesses at the California facility, according to Friday's  statement. SolarWorld also plans to cut temporary workers and close older production lines at its 1 gigawatt plant in Saxony, Germany.

SolarWorld CEO Frank Asbeck said in a statement that the measures will allow the company to keep its wage cost share at below 10 percent.

Especially in contrast to manufacturers who increasing relocate to low wage countries or come from there, this is of strategic importance. It means that we offer quality from Germany and quality made in the U.S. that is competitive with the Far East.

SolarWorld has been impacted by tepid demand in Germany and the United States. But as Germany's No. 2 company in terms of sales, SolarWorld is still faring far better than others within the industry. In August alone:

On a side note: SolarWorld's celebrity spokesman is actor Larry Hagman, who played Texas oil baron J.R. Ewing in the hit 1980s TV series Dallas. Hagman happens to have one of the largest residential solar arrays in the U.S. installed at his California home.  Hagman wears the trademark Ewing 10-gallon hat in a series of SolarWorld ads where he talks about how he quit oil years ago. Check out one of the German ads below.

Photo: SolarWorld

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Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure