Suntech cuts US output and staff, cites tariffs and supply glut

Suntech is reducing three production shifts to one and cutting the workforce at its Goodyear, Arizona, solar panel manufacturing facility, blaming the move on global oversupply and higher production costs tied to recent import tariffs imposed by the US government.

"We will continue to produce solar panels in Arizona to meet the needs of our customers, particularly those who are willing to pay a premium for US-manufactured products," says EL "Mick" McDaniel, managing director of Suntech America.

"Our employees in Goodyear have done a tremendous job. However, all PV manufacturers globally are facing challenging market and political conditions, and rationalizing production is necessary to maintain a competitive cost structure," he adds.

The Goodyear facility's annual production throughput will decrease from about 45MW to 15MW, and roughly fifty positions will be eliminated. The decision is part of Suntech's global restructuring efforts to align production capacity and reduce operating expenses by 20% through 2013, according to McDaniel.

The US International Trade Commission on 7 November voted to impose unilateral tariffs of 35.97% on Suntech solar cells produced in China. Solar cells are a key component used at the Goodyear plant.

Suntech says the rising costs of components like solar cells increases the cost of manufacturing solar panels in the US. Tariffs on solar cells come in addition to tariffs imposed by the US government last year on aluminum frames, another key input for solar panel manufacturing.

"Subsequent to our decision to invest in Arizona, unnecessary upstream trade barriers have made it difficult and more costly to manufacture solar panels in the US In addition, these new tariffs limit our ability to utilize Suntech's advanced solar cell technology imported from China," says McDaniel.

The company continues to assess its options. If the political and business environment improves, Suntech may reconsider expanding manufacturing operations in the US, he says.