- Joined
- Aug 9, 2010
- Location
- Coral Springs, Florida
I wish I could post the story today from the Wall Street Journal but unfortunately I get it on my Ipad so can't cut and paste it. However the story was about the bankruptcy filing of First Solar. This is a company up in Massachusetts that makes solar panels. The company was doing well in 2008 but has declined for the following reasons:
1. The price of a material their competitors used was very high until recently so this gave First Solar a competitive leg up since the manufactured the panels using a different material. As the price fell for their competitors materil it gave their competitors better pricig power (Ok this one is free market and thats just the breaks).
2. The company said it could not compete paying their workforce in Massachusetts $15.00 and hour when their competitors in China pay their labor force in China $1.00 and hour for the same work.
3. The company said the Chinese government is giving huge subsidies to their solar panel producers and the technology is being deployed in China to save energy costs. Essentially the Chinese are supporting this industry to capture the market share in this manufacturing process.
I found this story interesting because it laid out pretty well what alot of manufacturers are up against. Now occasionally we go through Buy American phases at the consumer level but if you are running a company and need to cut costs to keep your own workers employed then you are probably going to be using the cheaper solar panels (especially if you are a large energy consumer of energy like a grocery store etc.).
I don't know what the answer is to all of this but it seems we keep falling further behind and losing our manufacturing base. I know Americans are not going to line up to work for $1.00 and hour and we have very little leverage at this point to force the Chinese to increase their wages. I guess the bottom line is that another US Company just filed for bankruptcy and a bunch of people lost their jobs
1. The price of a material their competitors used was very high until recently so this gave First Solar a competitive leg up since the manufactured the panels using a different material. As the price fell for their competitors materil it gave their competitors better pricig power (Ok this one is free market and thats just the breaks).
2. The company said it could not compete paying their workforce in Massachusetts $15.00 and hour when their competitors in China pay their labor force in China $1.00 and hour for the same work.
3. The company said the Chinese government is giving huge subsidies to their solar panel producers and the technology is being deployed in China to save energy costs. Essentially the Chinese are supporting this industry to capture the market share in this manufacturing process.
I found this story interesting because it laid out pretty well what alot of manufacturers are up against. Now occasionally we go through Buy American phases at the consumer level but if you are running a company and need to cut costs to keep your own workers employed then you are probably going to be using the cheaper solar panels (especially if you are a large energy consumer of energy like a grocery store etc.).
I don't know what the answer is to all of this but it seems we keep falling further behind and losing our manufacturing base. I know Americans are not going to line up to work for $1.00 and hour and we have very little leverage at this point to force the Chinese to increase their wages. I guess the bottom line is that another US Company just filed for bankruptcy and a bunch of people lost their jobs