"China’s solar industry faces turmoil of its own" by Keith Bradsher | New York Times, October 05, 2012
BEIJING — China in recent years established global dominance in renewable energy, its solar panel and wind turbine factories forcing many foreign rivals out of business and its policymakers hailed by environmentalists around the world as visionaries.
But now China’s strategy is in disarray. Although worldwide demand for solar panels and wind turbines has grown rapidly over the past five years, China’s manufacturing capacity has grown even faster, creating enormous oversupply and a ferocious price war.
The result is a looming financial disaster, not only for manufacturers but for state-owned banks that financed factories with approximately $18 billion in low-rate loans and for municipal and provincial governments that provided loan guarantees and sold manufacturers land at deeply discounted prices.
China’s biggest solar panel makers are losing as much as $1 for every $3 of sales this year, as panel prices have fallen by three-fourths since 2008. Even though the cost of solar power has fallen, it still remains triple the price of coal-generated power in China, requiring substantial subsidies through a tax imposed on industrial users of electricity.
The outcome has left even the architects of China’s renewable energy strategy feeling frustrated and eager to see many businesses shut down, so the most efficient companies may be salvageable financially....
Li Junfeng, a longtime director general for energy and climate policy at the National Development and Reform Commission, the country’s top economic planning agency, said he wanted banks to cut off loans to all but the strongest solar panel companies and let the rest go bankrupt. But banks — which were encouraged by Beijing to make the loans — are not eager to acknowledge that the loans are bad and take large write-offs, preferring to lend more money to allow the repayment of previous loans.
Oh, no, China has its own bank bailout problem.
Many local and provincial governments also are determined to keep their hometown favorites afloat to avoid job losses and to avoid making payments on loan guarantees, he said.
Looks like the U.S. Congress.
Li’s worries appear to be broadly shared in Beijing.
Chinese solar company executives blame their difficulties partly on US decisions last spring to impose tariffs on solar panel imports, and on the European Union’s recent decision to start its own anti-dumping investigation.
‘‘It is not a Chinese industry problem. It is a global solar industry problem,’’ said Rory Macpherson, a spokesman for Suntech Power, one of the largest Chinese solar panel manufacturers. ‘‘
Li said the solar industry’s problems were the result of overcapacity in China and not the fault of trade restrictions.
Yet he insisted that if the Chinese government could turn back the clock and revisit past renewable energy decisions, it would not do anything differently.
The problem lies in the eagerness of Chinese businesses to rush into any new industry that looks attractive and swamp it with investments, he said.
They have been hanging around global capitalists too much.
Chinese companies and their bankers are then far more reluctant than Western companies to admit defeat for investments that prove unprofitable.
Because the government can't really bail them out, huh?
--more--"
Related:
"Suntech subsidiary on brink" by Keith Bradsher | New York Times, March 21, 2013
HONG KONG — Suntech Power, a Chinese manufacturer that became the world’s largest producer of solar panels by 2011 only to be battered by plummeting prices, announced Wednesday that its main operating subsidiary had been pushed into bankruptcy by eight Chinese banks.
Suntech was the Icarus of the solar panel industry, with production that soared year after year on heavy investment, as Western investors bought up its New York-traded shares and its international debt issues.
Uh-oh. Bailout will be needed.
Uh-oh. Bailout will be needed.
But a 10-fold expansion of overall Chinese solar panel manufacturing capacity from 2008 to 2012 produced a three-quarters drop in solar panel prices, undermining the economics of the business.
But if demand is up?
Rapid expansion of natural gas production in the United States and a curtailment of subsidies in the European Union also hurt solar panel prices, as did a US imposition of import tariffs.
Related: Flabbergasted at Boston Globe Flatulence
Yeah, never mind those "minimal" earthquakes taking place wherever they frack. And don't mind the water you can light fire to, either. Shale is our $avior.
But if demand is up?
Rapid expansion of natural gas production in the United States and a curtailment of subsidies in the European Union also hurt solar panel prices, as did a US imposition of import tariffs.
Related: Flabbergasted at Boston Globe Flatulence
Yeah, never mind those "minimal" earthquakes taking place wherever they frack. And don't mind the water you can light fire to, either. Shale is our $avior.
The European Union is also completing its own trade investigation of Chinese solar panel shipments that could lead to steep tariffs there as well.
I suppose a trade war is better than a shooting war, but why can't we all just trade together? I'm tired of having ENEMIES when there is NO NEED!
I suppose a trade war is better than a shooting war, but why can't we all just trade together? I'm tired of having ENEMIES when there is NO NEED!
Ocean Yuan, the president of Grape Solar, an importer of solar panels based in Eugene, Ore., said he foresaw a series of bankruptcies by big Chinese solar panel manufacturers, some of which have very high debt ratios like Suntech’s. Chinese manufacturers lost as much as $1 for every $3 of sales last year as they struggled to keep factories open despite falling prices.
“They are bleeding every day,’’ Yuan wrote in an e-mail. “The more they sell, the more they lose money.’’
The Chinese banks quietly asked a court in Wuxi Monday to declare the operating subsidiary, Wuxi Suntech, to be insolvent and begin restructuring it. The operating subsidiary notified the court on Wednesday that it did not object to the insolvency petition.
--more--"
Related:
China Stealing Solar Secrets
Why? the companies are moving there anyway.
US affirms steep tariffs on China solar panels
China Stealing Solar Secrets
Why? the companies are moving there anyway.
US affirms steep tariffs on China solar panels
China takes EU case to World Trade Organization
Also see:
"The new solar energy zones were chosen because they are near existing power lines, allowing for quick delivery to energy-hungry cities. Also, the chosen sites have fewer of the environmental concerns — such as endangered desert tortoise habitat — that have plagued other projects."
Also see:
"The new solar energy zones were chosen because they are near existing power lines, allowing for quick delivery to energy-hungry cities. Also, the chosen sites have fewer of the environmental concerns — such as endangered desert tortoise habitat — that have plagued other projects."
Unfortunately, solar and wind don't have enough kick to run an industrial or technological society.
And while we are over here now:
"Failure of A123 Systems becomes part of fray" by Erin Ailworth | Globe Staff, October 17, 2012
And while we are over here now:
"Failure of A123 Systems becomes part of fray" by Erin Ailworth | Globe Staff, October 17, 2012
Advanced battery maker A123 Systems Inc. filed for bankruptcy protection Tuesday after burning through more than $100 million in taxpayer money, thrusting the Waltham company into the middle of the presidential sparring over energy and economic policies....
A123’s bankruptcy filing represented a stunning fall for a company once viewed by both the Obama and Governor Deval Patrick administrations as a key component of a clean-energy driven economy. The Department of Energy awarded nearly $250 million in stimulus money to A123 to build plants in Michigan, more than half of which was spent by the company.
Related: China Post as Easy as A to 123
Massachusetts made a loan of $5 million to A123. Richard K. Sullivan Jr., state secretary of Energy and Environmental Affairs, said his office would monitor the proceedings and recoup the state’s money if possible.
A123 filed for Chapter 11 bankruptcy, which means it could reorganize and emerge from the process as an operating company. A123 employs 1,763 people worldwide, including 322 in Massachusetts.
As governor, Romney did not provide taxpayer money to A123, according to the state energy department. But a few weeks after taking office in 2003, Romney announced $9 million in grants for alternative energy companies, including Lowell solar cell maker Konarka Technologies Inc., which went bankrupt earlier this year.
Related: Obama Reflects Sunshine Back Into Romney's Eyes
Maybe you want to take a shortcut.
A123’s bankruptcy was largely the result of slower-than-expected adoption of hybrid and electric vehicles as the economy struggled and fuel prices moderated. A123 tried to shift away from autos, expanding into power storage for utilities and other markets, but that came too late, analysts said.
Related: Slow Saturday Specials: Obama Taking America For Ride
“It cost AOne more to make the product than it could sell it for,” said Andrea James, senior research analyst at Dougherty & Co. LLC in Minneapolis. “It does no good to be an industry leader in a money losing business.”
I'll bet the New York Times can empathize.
A123 warned investors in recent months that it was in danger of running out of cash. But in August, it looked like it found a savior in Wanxiang Group, a Chinese autoparts conglomerate that agreed to invest up to $465 million. Under the pact, Wanxiang could have ended up with control of A123.
That deal ended with A123’s bankruptcy filing. Instead, A123 said it would sell the assets of its automotive business — including plants in Livonia and Romulus, Mich. — to a rival US battery maker, Johnson Controls Inc. of Milwaukee. The deal is valued at $125 million.
The deal needs to be approved by the court, which could award A123 assets to a higher bidder, if one emerges.
In a statement, A123 chief executive David Vieau said the Wanxiang deal ran into unspecified, but “significant challenges to its completion.” Vieau and the company declined further comment.
Related: MSM Monitor: The Vieau From A123
How things looking from China these days?
A123’s deal with Wanxiang drew sharp criticism from congressional Republicans because it risked giving a Chinese company control of cutting edge technology developed with US taxpayer money. The deal would have required several approvals by the US and Chinese governments, a potentially time consuming process.
And then they moved there.
Republicans senators Charles Grassley and John Thune also criticized A123’s bankruptcy Tuesday as a bad deal that has left taxpayers hanging....
At its peak three years ago, A123 stock traded above $25 a share. It closed Tuesday at 6 cents....
I could buy a bunch of those.
“A123’s bankruptcy is yet another failure for the president’s disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work,” said Andrea Saul, a spokeswoman for Romney.
Spokeswoman for who? Some hypocrite?
Related: China Post as Easy as A to 123
Massachusetts made a loan of $5 million to A123. Richard K. Sullivan Jr., state secretary of Energy and Environmental Affairs, said his office would monitor the proceedings and recoup the state’s money if possible.
A123 filed for Chapter 11 bankruptcy, which means it could reorganize and emerge from the process as an operating company. A123 employs 1,763 people worldwide, including 322 in Massachusetts.
As governor, Romney did not provide taxpayer money to A123, according to the state energy department. But a few weeks after taking office in 2003, Romney announced $9 million in grants for alternative energy companies, including Lowell solar cell maker Konarka Technologies Inc., which went bankrupt earlier this year.
Related: Obama Reflects Sunshine Back Into Romney's Eyes
Maybe you want to take a shortcut.
A123’s bankruptcy was largely the result of slower-than-expected adoption of hybrid and electric vehicles as the economy struggled and fuel prices moderated. A123 tried to shift away from autos, expanding into power storage for utilities and other markets, but that came too late, analysts said.
Related: Slow Saturday Specials: Obama Taking America For Ride
“It cost AOne more to make the product than it could sell it for,” said Andrea James, senior research analyst at Dougherty & Co. LLC in Minneapolis. “It does no good to be an industry leader in a money losing business.”
I'll bet the New York Times can empathize.
A123 warned investors in recent months that it was in danger of running out of cash. But in August, it looked like it found a savior in Wanxiang Group, a Chinese autoparts conglomerate that agreed to invest up to $465 million. Under the pact, Wanxiang could have ended up with control of A123.
That deal ended with A123’s bankruptcy filing. Instead, A123 said it would sell the assets of its automotive business — including plants in Livonia and Romulus, Mich. — to a rival US battery maker, Johnson Controls Inc. of Milwaukee. The deal is valued at $125 million.
The deal needs to be approved by the court, which could award A123 assets to a higher bidder, if one emerges.
In a statement, A123 chief executive David Vieau said the Wanxiang deal ran into unspecified, but “significant challenges to its completion.” Vieau and the company declined further comment.
Related: MSM Monitor: The Vieau From A123
How things looking from China these days?
A123’s deal with Wanxiang drew sharp criticism from congressional Republicans because it risked giving a Chinese company control of cutting edge technology developed with US taxpayer money. The deal would have required several approvals by the US and Chinese governments, a potentially time consuming process.
And then they moved there.
Republicans senators Charles Grassley and John Thune also criticized A123’s bankruptcy Tuesday as a bad deal that has left taxpayers hanging....
At its peak three years ago, A123 stock traded above $25 a share. It closed Tuesday at 6 cents....
I could buy a bunch of those.
“A123’s bankruptcy is yet another failure for the president’s disastrous strategy of gambling away billions of taxpayer dollars on a strategy of government-led growth that simply does not work,” said Andrea Saul, a spokeswoman for Romney.
Spokeswoman for who? Some hypocrite?
--more--"
"Cash-fueled climb led to fall of A123 Systems; Waltham battery maker found no niche" by Erin Ailworth | Globe Staff, October 24, 2012
In the fall of 2009, Governor Deval Patrick joined chief executive David Vieau on a tour of what was perhaps Massachusetts’ hottest company: A123 Systems Inc.
The Waltham battery maker had just raised $380 million in an initial public offering as investors shrugged off the recession and drove the stock 50 percent above the company’s initial pricing. Nearly $400 million in government grants, loans, and tax incentives were already rolling into the company on the promise of a technology that could help transform the nation’s flailing auto industry into a leader in electric cars....
But that flood of money would sow the seeds of A123’s fall....
I'd like to fail that way.
A123 filed for Chapter 11 protection having never turned a profit....
What?
With new technologies as a major component of President Obama’s energy policy, and billions of dollars in stimulus money directed at building an alternative energy industry, it was not long before Vieau and his team found themselves hobnobbing with federal bigwigs like Energy Secretary Steven Chu.
Related: Sunday Globe Special: Moniz's Money
Ah-Chu!
Nearly $250 million in US taxpayer money was soon on its way to help A123 build 600,000 square feet of factory space in Romulus and Livonia, Mich., to manufacture batteries for Detroit’s auto industry. When A123’s Livonia plant opened in 2010, Chu and Jennifer Granholm, then Michigan’s governor, were on the guest list.
Vieau led reporters, customers, and others on tours, pointing out the gleaming silver and white machinery whirring under the watchful guidance of new workers — some of whom had lost jobs in the recession.
The company continued to expand, providing batteries for hybrid BMWs, SAIC’s Roewe sedans, and the Karma, made by Fisker Automotive in California. Massive A123 power storage systems, meanwhile, were shipped to utility customers in Europe and South America.
At its peak, A123 employed several thousand employees in Michigan, Massachusetts, China, and Germany.
But even as it grew, revenues failed to keep up with costs. The Waltham firm was bleeding cash, losing $86.59 million in 2009, $152.94 million in 2010, and $257.76 million in 2011, court records show....
You know who got stuck, taxpayers.
--more--"
Time to power down:
A123 is latest aid recipient to file bankruptcy
Bankrupt A123 could be a target of bid war
China firm’s aid to Waltham’s A123 OK’d
Chinese company can support A123
Chinese company wins bid for A123 Systems
The Waltham battery maker had just raised $380 million in an initial public offering as investors shrugged off the recession and drove the stock 50 percent above the company’s initial pricing. Nearly $400 million in government grants, loans, and tax incentives were already rolling into the company on the promise of a technology that could help transform the nation’s flailing auto industry into a leader in electric cars....
But that flood of money would sow the seeds of A123’s fall....
I'd like to fail that way.
A123 filed for Chapter 11 protection having never turned a profit....
What?
With new technologies as a major component of President Obama’s energy policy, and billions of dollars in stimulus money directed at building an alternative energy industry, it was not long before Vieau and his team found themselves hobnobbing with federal bigwigs like Energy Secretary Steven Chu.
Related: Sunday Globe Special: Moniz's Money
Ah-Chu!
Nearly $250 million in US taxpayer money was soon on its way to help A123 build 600,000 square feet of factory space in Romulus and Livonia, Mich., to manufacture batteries for Detroit’s auto industry. When A123’s Livonia plant opened in 2010, Chu and Jennifer Granholm, then Michigan’s governor, were on the guest list.
Vieau led reporters, customers, and others on tours, pointing out the gleaming silver and white machinery whirring under the watchful guidance of new workers — some of whom had lost jobs in the recession.
The company continued to expand, providing batteries for hybrid BMWs, SAIC’s Roewe sedans, and the Karma, made by Fisker Automotive in California. Massive A123 power storage systems, meanwhile, were shipped to utility customers in Europe and South America.
At its peak, A123 employed several thousand employees in Michigan, Massachusetts, China, and Germany.
But even as it grew, revenues failed to keep up with costs. The Waltham firm was bleeding cash, losing $86.59 million in 2009, $152.94 million in 2010, and $257.76 million in 2011, court records show....
You know who got stuck, taxpayers.
--more--"
Time to power down:
A123 is latest aid recipient to file bankruptcy
Bankrupt A123 could be a target of bid war
China firm’s aid to Waltham’s A123 OK’d
Chinese company can support A123
Chinese company wins bid for A123 Systems
