Abound Solar to become GOP talking point in wake of layoffs, unreported shutdown?
Update below: It's Super Tuesday, with voters in ten states choosing among Mitt Romney, Rick Santorium, Newt Gingrich and Ron Paul for a Republican presidential candidate. And whoever wins the nomination is apt to use controversial Department of Energy loans to alternative energy companies as a talking point in the campaign to defeat Barack Obama. Right now, California-based Solyndra is the firm most often cited. But is Loveland's Abound Solar next?
If so, expect a new report from Complete Colorado to be part of the conversation. According to the site, Abound Solar, which announced layoffs of 180 full-time workers (not to mention 100 part-timers) on February 28, just over a year after receiving a $400 million DOE loan guarantee, shut down for ten days over the holidays. Moreover, the e-mail informing employees of the closure included a warning against staffers talking about the move in a way that might imply the company as a whole was in trouble. An excerpt reads:
Don't let the rumor mill create false purposes for this shut down. Holiday shut downs in businesses are common and represent best of class employer actions. We are shutting down to better manage the inventory, cost and to help employees have time with their families. Any other story is a rumor and not helpful in our building open and effective communications.
Update, 9:00 a.m. March 2012: Moments ago, we were able to reach Steve Abely, chief financial officer for Abound Solar. He had not seen the Complete Colorado article prior to our conversation, but after hearing about its contents, he shared his thoughts about the holiday shutdown, subsequent layoffs and the prospect of the company being singled out during the presidential campaign season.
The Abound Solar management team. Steve Abely is second from the left in the bottom row.
Regarding the unreported nature of the holiday shutdown, Abely says, "We're a private company, so we don't have to share anything with the wider public. If we choose not to, we don't have to. But as far as the shutdown itself goes, it was to manage inventory. We built up excess inventory, and it didn't make sense to keep on producing then. And shutdowns around the Christmas time period are pretty typical. A lot of employees like them, so there were dual purposes. They seemed to fit together well, so that's why we did it."
Abely concedes that linking the shutdown to the layoffs a couple of months later makes sense on a surface level, "but I don't think you can make that next step to talk about the survivability of the company, because you don't know that. Right now, what we've done is shut done production so we can retool the line and come out with a new product we think will be very competitive in the marketplace. And it doesn't make sense to produce a product when you're losing money on that product."
Regarding the new product, Abely describes it as "a solar module, like the type you've seen out at DIA and a lot of places. But the difference between ours and some of the solar panels you see is that we use a material called cadmium telluride, which is a different type of semi-conductor. It's glass on glass, and that produces lower cost. It should ultimately be the low-cost solution."
According to Abely, "we've already proven that the product works. NREL (the National Renewable Energy Laboratory) tested an initial version and it proved out in the 85 watts per panel range, which is about 20 to 25 percent better than the product we were producing right before we shut down."
Hence, the plan is to "retrofit some of the equipment, perfect the process itself and do some testing internally with the product before we send it to customers and have them do some validation. Then, hopefully, that produces orders, and you ramp production back up." Abely estimates the time period to accomplish these goals as "six months on the low side and nine months on the high side."
In the meantime, Abely sees attempts to compare Abound Solar to Solyndra, which declared bankruptcy and ceased operation after receiving hundreds of millions in Department of Energy loans, are shaky at best. "I don't know all the particulars about Solyndra," he allows. "I don't think anybody does. But they were using a very different technology from what we're using to manufacture solar panels, and they had a published cost in their filings that was three times what our manufacturing cost is. Ultimately, this is about producing electricity, and the lowest cost wins."
As for the prospect of Abound Solar becoming a political football in the presidential horse race, he says, "I am not going to guess about what any political party can use as campaign slogans or whatever they are. But ultimately, the more successful we are, the less someone can use us as a negative talking point."
He adds that "I'm very positive about the product. The only issue is the marketplace itself. Clearly, Chinese competitors that have been subsidized by their own government are selling products in the U.S. and other markets at below cost. So there's a little bit of unfair competition going on."
Look below to see the Abound Solar e-mail published by Complete Colorado, plus a February 28 Abound Solar press release that doesn't note the aforementioned layoffs until the third paragraph.
Abound Solar February 28 press release:
Abound Solar Announces Plan to Accelerate Production of its Next Generation High-Efficiency Modules
LOVELAND, Colo. -- FEBRUARY 28, 2012 -- Abound Solar, a leading manufacturer of thin-film cadmium telluride photovoltaic modules, today announced that the company will cease production of its first-generation solar module in order to accelerate the manufacturing process and equipment changes needed for the production launch of its next generation high-efficiency module.
Abound Solar's new high efficiency "AB2" 85 watt module represents a 12.5 percent solar efficiency as verified by the U.S. Department of Energy's National Renewable Energy Lab (NREL). Several-hundred AB2 modules were produced in early January 2012 on commercial production equipment.
The suspension of first generation module production will result in the temporary reduction of approximately 180 permanent jobs from its Colorado facilities. Once manufacturing equipment has been modified and performance tested, Abound Solar expects to resume mass production with a 12.5-13 percent efficiency module by the end of 2012.
"While this is a difficult move with regards to temporarily reducing our workforce, we know that accelerating the introduction of our next generation module will bring significant benefits to our customers and allow us to create even more jobs in the future," said Craig Witsoe, president and CEO of Abound Solar. "Current market conditions are challenging for all U.S. solar manufacturers, but the long-term winners will be manufacturers of the lowest cost per watt, most reliable systems. By focusing our resources to accelerate scale-up of our next generation high efficiency technology, we will sustainably lower total system costs for our customers, increase our own profitability and grow U.S. jobs and energy security."
Further information about the announcement can be found here.
About Abound Solar
Abound Solar is a leading manufacturer of next generation, cadmium telluride thin-film photovoltaic modules. Abound Solar provides a made in the U.S.A. product designed to meet the unique requirements of commercial and utility scale installations. Abound Solar uses a robust, commercial scale, continuous manufacturing process that results in low cost, high quality modules that provide superior performance in high heat and diffuse light conditions.
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