Posted on 01/19/2011 6:43:41 AM PST by SeekAndFind
Evergreen Solar announced last week that it was closing its plant in Devens, Mass., laying off 800 workers, and moving production to China.
Evergreen’s factory had received more than $40 million in subsidies, which led many to see the plant closing as lesson in the futility of green energy and industrial policy. But what does Evergreen’s story really teach us about solar energy, public subsidies and the future of American manufacturing?
Evergreen Solar’s story begins in 1994, when three alumni of Mobil’s solar division broke away to form their own company. They started in a 2,500-square-foot lab in Waltham, Mass., which has long housed innovative industry, including America’s first integrated textile mill and the Waltham Watch Company, which pioneered high-quality watches with interchangeable parts. Today, Waltham is a venture-capital hub that succeeds by providing abundant commercial real estate and easy access to the scientific community of greater Boston.
Proximity to cutting-edge ideas was surely an advantage for Evergreen Solar in the early days because its principals worked with Emanuel Sachs, a distinguished mechanical engineer at the Massachusetts Institute of Technology, who invented the “string ribbon” process for making solar cells.
“String ribbon” technology was Evergreen’s big idea; it offers the possibility of far more affordable photovoltaic cells. Evergreen began selling “string ribbon” solar panels in 1997 and moved to a much larger space in Marlboro, Mass., in 2000.
Evergreen proved adept at finding financing and global partners. The company went public in 2000, which provided funds to expand operations and repay the venture capitalists, like the Utech Fund, which placed an early bet on “string ribbons.”
An early infusion of $5 million also came from Kawasaki in 1999. In 2005, Evergreen and the European solar company Q-Cells came together to construct a production plant in Thalheim, Germany.
(Excerpt) Read more at economix.blogs.nytimes.com ...
I once lived near Devens...
What does it teach us? That manufacturing in America is dying a slow death....
well, goodbye to the 800 jobs in Devens. Those were jobs that would not have been there had the government not used tax payer money to subsidize Evergreen.
What was Masschusetts thinking anyway?
The main difficulty with solar energy has always been cost, which is why the falling price of solar panels that seemingly pushed Evergreen to close Devens is understandable.
The lesson (imho) is America cannot remain a service based economy. American manufacturing is leaving and has left, never to return? The coming adjustment, already underway (imho) is going to be more severe than most can comprehend. Without America turns toward 'fair trade agreements' instead of forcing a so-called 'free trade agreements' on our population, nothing will change. Free trade agreements (as written) are not free; instead the free trade agreements are a net loss....imho
And in keeping up with the typical Liberal dilusion, the author still thinks if we only just spent more money somehow it could have worked
What a load of bull. First off Evergreen was going out of business and relocated to China as a last ditch effort. They still may go out of business.
Second, the country that produces becomes wealthy.
Also, good engineers don't just pop out of thin air or engineering schools. Most of them start out as technicians and obtain their degrees at night colleges. With no manufacturing base left in America it is not too hard predict in the future, when the bulk of inventions are being produced in China.
Building solar panels in China and selling them to the U.S. from an idea hatched in the US will make China richer.
Japan's labor costs eventually increased to the point that Japan began to outsource manufacturing back to the U.S.
Now China is playing the musical chair game. Their labor costs are increasing.
What is bull in this story is the last paragraph that the elitist professor wrote. As if some day the U.S. will contain 300 million P.h.d’s roaming around selling ideas to slave labor nations. Talk about a moonbat. Universities professors take way too much credit when it comes to inventions and technolgy.
What it teaches, is that we can't compete with China's wage rate of $2/day. If we are going to compete with China, we need to automate and heavily. The big $ imported from China are electrical
Here is our imports from China
Table 3: Top US Imports from China 2009 ($ billion)
*Calculated by USCBC
Source: US International Trade Commission
| HS# | Commodity description | Volume | % change over 2008 |
|---|---|---|---|
| 85 | Electrical machinery and equipment | 72.9 | -9.2 |
| 84 | Power generation equipment | 62.4 | -4.2 |
| 61,62 | Apparel | *24.3 | *1.5 |
| 95 | Toys and games | 23.2 | -14.6 |
| 94 | Furniture | 16.0 | -17.4 |
| 72,73 | Iron and steel | *8.0 | *45.9 |
| 64 | Footwear and parts thereof | 13.3 | -7.9 |
| 39 | Plastics and articles thereof | 8.0 | -10.1 |
| 42 | Leather and travel goods | 6.0 | -18.9 |
| 90 | Optics and medical equipment | 5.6 | -9.4 |
Since the majority of our imports are in Electrical equipment and power generation, we need to find a way to automate the production of these items so that our labor costs fall close to the Chinese level. At some point transportation costs will kick in, and it will be cheaper to manufacture in the U.S. All the jobs that go with manufacturing will return to the U.S. as well. The automation will benefit us in the long run too.
Someone posted a list of 12 major US power transformer manufacturers. So we still compete in that second category. We need to protect this industry. At the same time we need to start chipping away at the first. We should target the biggest category items for return to the U.S. while leaving anything that generates toxic waste.
” we need to automate and heavily. “
Ah, yes - the ‘Productivity Trap’ - those $2/day Chinese workers are turning around and spending that $2 on goods and services, supporting other industries and businesses...
How much does the most sophisticated factory machine spend??
I can fix that right now.
All we need to do is buy a one way airline ticket to China for all the Union Bosses, so they can go over there and Unionize the Chinese work force.
Ramp up their pay scale to cost excessive.
As do universities and professors take too much credit for informing students to look to the state or the universities and professors for their answers. Another whole subject entirely, where common sense is sacrificed for words on paper or opinions from mouths, where going to the trenches means not getting one's hands or thoughts dirtied by seeing and sensing a bigger picture, instead education is the be all to end all of the drudgery of life.
Your thoughts are correct. I pray I only added to your correct thoughts.
Yes, automation will substitute capital for labor. But, unfortunately, the Chinese are smart and can adopt automation just as quickly. The gap between wage rates is far too high to overcome by automation alone.
No they aren't buying "goods and services". China won't let their people do that. They are buying US debt and US companies. Which they dismantle and ship to China.
The sophisticated factory machine may not buy our debt like the Chinese, but the supporting labor will generate taxes and spend in the U.S., helping the US economy instead of using the proceeds against us. Otherwise that labor sets sidelined and requires unemployment checks and indigent care further weakening us.
I also believe that there are still a lot of intellectual property problems inherent with doing business with Mainland China.
As for the best engineers being those who worked as technicians duirng the day while going to night school, I would have to agree with you on that. Those are the engineers that, upon their first engineering job, already have a grasp of the real world. But try telling that to the people working in Human Resources. I know quite a few who look down on anyone who did not complete their degree in four years. Never mind if the “ideal” candidate according to this standard has work experience limited to, say, McDonalds. Plus HR has pushed the view that engineering is merely a steppingstone to management, where one is expected to forget everything technical and just spout whatever is the latest new age management fad. “Commander Salamander” has a milblog where he has a line that sums up the managementspeak that has infiltrated the USNavy perfectly:
“Proactively “From the Sea”; leveraging the littoral best practices for a paradigm breaking six-sigma best business case in the global commons, rightsizing the core values supporting our mission statement via the 5-vector model through cultural diversity.” Got your head spinning on that one?
Meanwhile, China is not only copying technology (some of it purchased with campaign contributions to the DNC), they are even making their own improvements, such as their own entry into the supercomputer speed race.
Simple: No fuel source to procure, and lower operating costs.
- no exploration/drilling/mining jobs for a carbon-based fuel source.
- no jobs to construct and operate the storage and processing facilities of carbon-based fuel sources.
- no transportation jobs to deliver the carbon-based fuel sources.
- fewer construction jobs to install solar panels or erect wind turbines.
- fewer jobs to operate and maintain solar panels or a wind farm.
- no by-products/waste to use in secondary industries.
- etc, etc, etc
I have worked in manufacturing for over 20 years. I have never let H.R. tell me what engineers we can hire. Also a bad engineer does not last long in industry.
H.P. began the process of limiting their engineering pool to only top tierd schools about 20 years ago. Look where they are now, a shell of their former self. A good engineer is made not born. You can have all the great ideas in the world but you still need someone to build it.
If you get the labor costs low enough, transportation costs become paramount. If it can be automated, it will make sense to have the production either close to the market or close to the raw materials.
One of the problems I see, is that the means of production is always undervalued in the capital markets. Capital markets only price the return to the shareholder. But the benefits to the country are much larger and include, the value of taxes generated both by the business and by the labor employed, as well as the benefit of having the labor employed in the local economy.
A state controlled economy like China can take advantage of that. That can probably keep wages artificially low. And at the same time, pay more for strategic industries than the capital markets would normally require.
Unless and until we somehow figure out a way of pricing those into the value of firms, it doesn't make sense to do complete free trade with a country that isn't on an economic parity with us.
And I DO NOT recommend driving the value of those additional benefits to $0 by eliminating all taxes and social benefits at all government levels. That's not a realistic option.
China would simply execute the Union bosses. Your plan won't work, but I say we try it anyway. LOL
China would simply execute the Union bosses. Your plan won't work, but I say we try it anyway. LOL
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