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Here comes the sun: SunPower takes over SolarWorld plant
Six months ago, as officials at Hillsboro's SolarWorld manufacturing plant on Evergreen Road seriously considered shutting the company's doors for good, a team of engineers and others from the Bay Area boarded a plane bound for Portland.
They were tasked with touring the Hillsboro solar panel company ahead of a possible purchase, but the team was reluctant to make the trip to the Silicon Forest. The team was unsure that the Hillsboro facility would be worth the time and millions of dollars needed to bring it back up to full strength.
They came back feeling differently.
"Whoa," said Tom Werner. "These guys (in Hillsboro) are good."
Werner, the chief executive officer of San Jose, Calif.-based SunPower Corporation, was in Hillsboro last week for a visit of the newly purchased facility.
SunPower purchased SolarWorld this week for an undisclosed amount, putting an end to months of speculation over the fate of the Hillsboro solar panel maker, which struggled after its parent company filed for insolvency last year.
Federal regulators in the United States and Europe needed to sign off on the deal, which they did Monday. By Monday night Werner was in Hillsboro, ready to get to work.
"Deals don't always close," Werner told the Tribune on Wednesday, Oct. 3. "You don't spend the time here until it's closed."
But the deal to purchase SolarWorld was far from a sure thing. In fact, it very nearly didn't happen.
SolarWorld moved to its Hillsboro facility, 25300 N.W. Evergreen Road, a decade ago as the largest solar-wafer factory in the United States. The company was bursting at the seams, with more than 1,000 employees at its peak.
But a serious of challenges led its parent company, SolarWorld AG, to file for insolvency in Germany in 2017, and SolarWorld laid off hundreds of people from its Hillsboro facility as it tried to stay afloat.
Today, the company employs only about 250 people.
SolarWorld executives put the blame on a single source: China.
SolarWorld has accused the Chinese government of price gouging for years, alleging Chinese competitors committed trade abuses in U.S. markets. The company demanded sanctions on China for flooding the U.S. market with cheap products.
It was a struggle that went back years. In 2011, then-President Barack Obama called Chinese trade practices "questionable" and said that the United States would be more aggressive with enforcing trade laws.
In 2014, the U.S. Department of Justice filed criminal charges against five Chinese government officials after they allegedly hacked into SolarWorld's computers and stole emails and files from company executives. The emails reportedly contained information about the company's finances, production capabilities, cost structure and strategies, the company said at the time.
As Chinese competitors continued to push into American markets, domestic solar panel manufacturers closed up shop. SolarWorld signed onto a complaint with a Georgia competitor, asking for steep tariffs on foreign-made solar products in order to push back against Chinese solar companies.
Werner, SunPower's CEO, fought against those tariffs. He and several others in the domestic solar panel industry argued the tariffs would cost companies millions.
President Donald Trump approved the tariffs earlier this year, but SolarWorld executives still sought a way to keep the company's doors open.
Enter SunPower — but Werner said those same tariffs SolarWorld needed so badly nearly kept the company from purchasing it at all.
Company to invest millions into Hillsboro operation
SunPower found itself in a tough position, Werner said.
The company would pay millions under the imposed tariffs. Although SunPower is based in California, its manufacturing is done largely in the Philippines, Malaysia and Mexico, Werner said.
SunPower was spending as much as $2 million per week under the tariff. The company needed an American base for its manufacturing.
"The people making the decision said, 'We want more American manufacturing,'" Werner said.
So an operations team boarded that flight for Portland, to tour the Hillsboro facility that had pitched hard for tariffs for months.
"It's a credit to the team here," Werner said. "They really impressed the investigative team."
In April, SunPower began talks to purchase the Hillsboro facility, but Werner said everything hinged on the federal government granting SunPower an exemption around the tariff. Werner said he would have walked away from the purchase unless the company got the exemption.
"The catalyst to even consider this was the tariffs," Werner said. "In order to take on a facility that needed this kind of investment, it would be impossible for us to do both (purchase the company and spend $2 million per week on tariffs)."
Werner said the exemption just made sense.
"We aren't Chinese, we have large employment based in America and we're a unique American technology," Werner said. "It was a super-clear, rational argument."
Federal regulators agreed and granted the San Jose company an exemption last month, and Werner pushed forward with the purchase.
SunPower won't say how much it paid for SolarWorld Americas. Werner said the final price tag was "immaterial."
"What I will tell you is that this time next year, SunPower will have invested tens of millions of dollars into this facility," Werner said.
'The real deal'
Now that the deal is finalized, Werner said to expect plenty of growth and change at the Hillsboro facility.
SolarWorld's signs are expected to come down in the next several months, making way for SunPower monikers, Werner said.
Upgrades to the facility are expected to come in phases.
The company plans to invest millions to upgrade technology at the Evergreen Road plant, and sometime next year, it plans to hire back some of the positions SolarWorld cut as it struggled to stay afloat.
Werner said it's far too early in the process to know just how many people will need to be brought on board at the Hillsboro facility to ramp up production, but some estimates have put the number at about 100 new employees, a 40 percent staffing increase over current numbers.
"When we talk again in a year, more people will be employed here than compared to what we have today," Werner said.
In June, Werner told reporters his company would invest as much as $15 million in new upgrades and equipment into the Hillsboro facility.
There's a lot of work to do, Werner said.
"SolarWorld did a lot of leading-edge things," Werner said. "But as money became short in the last few years, they were doing less of that."
Hillsboro employees will continue to produce SolarWorld products over the next several months before switching over to SunPower panels, Werner said.
Werner said it's unlikely that SunPower will be able to compete against Chinese solar panels on cost alone. Rather, he said, the Hillsboro facility will be able to help the company develop better products.
"There are many very good people here in Hillsboro who could help us innovate," Werner said.
It's a highly competitive industry, as companies vie for technology that can produce larger and larger amounts of energy in a smaller and smaller solar panel.
Solar is the one of the fastest growing industries in the world, Werner said, easily outpacing other alternative energies, such as natural gas, nuclear and wind power. The industry is constantly changing, Werner said. Plans need to be fluid and companies need to be ready to turn on a dime.
"There is a great deal of change," he said. "China will change its policies, or the tariffs were imposed, or new variables come about."
Werner said he is committed to bringing the Hillsboro facility back to its former glory days.
"This is the real deal," he said. "We're not spending money on anything other than to succeed and upgrade this facility to a more competitive state. We're in this to win."
By Geoff Pursinger
Editor, Hillsboro Tribune
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