U.S. manufacturing operations of Meyer Burger to cease production.
Meyer Burger Ceases US Production, Potential Impact on German Operations
In a surprising turn of events, solar energy company Meyer Burger has announced it will halt production at its solar module factory in Goodyear, Arizona, due to financial difficulties and a lack of resources. This decision will likely provoke significant consequences for the company's operations in Saxony and Saxony-Anhalt, Germany.
The company has terminated the contracts of 282 employees in the U.S., leaving the future of the location uncertain. While it is unclear at this time what effect this decision will have on the Saxony and Saxony-Anhalt locations, a spokesperson for the company revealed that negotiations with bondholders are still pending.
In Hohenstein-Ernstthal, Saxony, a research and machinery location for solar production employs approximately 300 individuals who have been on short-time work since last year. Meanwhile, in Bitterfeld-Wolfen, Saxony-Anhalt, solar cells are produced, with around 300 employees also on short-time work since May.
Meyer Burger has been dealing with financial challenges for some time, partly due to fierce competition from China. In the fall, the company announced it would cut around 20 percent of its workforce, potentially including positions in Germany. However, the company had still assumed at that time that the US location would be established. In December, the company secured a bridging finance of nearly $40 million from creditors.
The shutdown of the US plant represents a major production capacity loss of 1.4 GW per year for the company. This decision may prompt operational and supply chain adjustments at the German locations, as well as potential job cuts or increased short-time work to reduce costs. Furthermore, Meyer Burger may reevaluate its global strategy in light of the US expansion halt, potentially increasing its reliance on European sites or consolidating operations.
[1] ntv.de, lar/dpa, economic-news-online.de, and businessinsider.de[2] Business Insider, March 12, 2022[3] CNBC, March 11, 2022[4] Economic News Online, March 11, 2022
- Meyer Burger's decision to cease production at its US factory could potentially result in policy changes within the community, as vocational training programs for the manufacturing industry, such as solar technology, might be affected in the affected German regions.
- Amidst increased competition from emerging manufacturing industries like solar energy, particularly from China, Meyer Burger's finance department is likely to re-assess its global strategy, which could involve increased investment in vocational training to sustain its European operations and maintain its position in the energy sector.
- As a result of the halt in US production, the energy-intensive processes, such as solar cell manufacturing, in the German locations might require adjustments in the supply chain, possibly leading to potential job cuts or increased short-term work, to ensure financial stability and efficiency.
