The failure of state-favored, crony capitalism: The Deval edition

Government which always thinks it knows better than the collective wisdom of millions of buyers and sellers should actually know better. Evergreen, the crown jewel of Patricknomics — the science of  picking trendy companies, is biting the hand that feeds it. Where are the unions on this double-cross. Evergreen takes taxpayer money and then ships jobs overseas!

One of Evergreen Solar Inc.’s top finance executives told investors last week that all of the solar system maker’s future expansion will be in China to make the company more cost competitive with Asian solar companies. Mark Fidler, vice president of finance at the Marlborough-based solar firm (Nasdaq: ESLR), told investors attending the JPMorgan Small/Mid Cap Conference Dec. 3 that “it’s much, much (less) expensive inherently to produce the wafer and cells in China versus in Devens” because of lower

labor and capital costs, and that “all of our expansion beyond Devens will be in China.”

Evergreen Solar plans to grow its solar wafer manufacturing facility capacity in Wuhan, China, to 500 megawatts by 2012 from its initial plans for a 100 megawatt facilty. At that pace, the China plant would far eclipse the capacity at its plant in Devens, which has the capacity to produce 130 megawatts to 140 megawatts of solar cells per year.

The disclosure comes a month after Evergreen Solar announced it was moving the production of panels from Devens to a contract manufacturer in the Asian nation and focusing Devens on its specialized wafer and cell manufacturing.

“We’ll be doing that to take advantage of the low-cost manufacturing region of China and the manual and testing processes involving lower cost structure for panel assembly in China,” Fidler said. “So all of our expansion beyond Devens will be in China

Read the entire article. And consider this gem from Ian Bowles what I’d call the sunk costs of low expectations.

“I feel they’ve made a good deal with the state and they intend to hold up their end of the bargain,” said Bowles, secretary of energy and environmental affairs.

Should we be happy with only 350 jobs at Devens? And why wasn’t this spelled out from the beginning.

About Karl Marx

Left wing libertarian conservative.