I believe that the move is smart for Evergreen Solar because the cost of producing in the U.S. is much higher than producing overseas. The new trend now is to outsource production and I believe this is the right move for Evergreen to continue its growth. It was said that "Evergreen’s stock, which traded above $100 in late 2007, closed Friday in New York at $3.03". As you can see the stock price has fallen dramatically due to inefficient use of sources. This seems to be the logical move to lower costs and experience growth.
Sunday, January 16, 2011
Solar Panel Maker Moves Work to China
Evergreen Solar, currently the third largest solar panel maker in the United States, is closing its American factory and shifting production to China. They are aided by at least $43 million by the government of Massachusetts. The move is a joint venture with a Chinese company in central China. The move was made as a result of higher support by the government in China. The move will be final by the end of March, with all 800 workers being laid off.
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If the Chinese government allows it (which they probably will considering this is a joint venture) Evergreen can sell to China. The Chinese are doing a much better job of investing in and installing green energy systems.
Not only is the cost of production lower in China, but the economy is booming. This looks to be the best possible location to invest such a company. Although when it comes to low labor costs, are the conditions of some Chinese labor systems, in which children and women work long hours in harsh conditions ethical?
This is a good example of how US economy's growth outweigh other issues such as ethical issues and environmental sustainability. 800 people became unemployed after the company's closure. China is smart to invest in the solar energy, because in the long run, it would save them much more while their environment is enhanced.
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