By Mary E. Arata and Chris Camire
Evergreen Solar Inc., one of the area’s largest employers, announced Tuesday it will close its manufacturing plant in Devens after a year of shifting that function to China.
Expected in the next three months, the closure will result in 800 layoffs. “It is a gradual ramp down to be completed by March 31 so employee numbers will ramp down accordingly,” company spokesman Chris Lawson said.
About a year ago, the company created a media uproar — and upset state officials — when it announced it would open a plant in China and eliminate manufacturing jobs in Massachusetts, citing costs. But in November, company officials said there were no immediate plans to reduce its Massachusetts work force.
State Rep. Sheila Harrington, a Groton Republican whose district includes Ayer and large portions of Devens, said the job loss is a blow to the region. It’s hard to believe they didn’t see this coming,” she said. “It will have a devastating impact.”
Monday, those same company officials said they can no longer compete with cheap solar panels produced in China, where manufacturing costs are considerably lower than those in the U.S. The company reported losses of $265 million in 2009, and $54 million through the first nine months of 2010.
“Although production costs at our Devens facility have steadily decreased, and are now below originally planned levels and lower than most Western manufacturers, they are still much
higher than those of our low-cost competitors in China,” company CEO Michael El-Hillow said in a statement.
Evergreen received $58 million in state aid to open the $430 million solar-panel plant in 2008 at the former military base in Devens. State officials said Tuesday they hope to recoup some of that money because Evergreen will not meet job commitments agreed in the state grant.
The agreement required the company to create 350 jobs and keep them for five years, until 2012. Evergreen also was supposed to maintain 310 existing jobs for seven years, until 2014, under the agreement.
“I’m most concerned for the 800 employees and how they’ll be dealing with losing their livelihood,” said State Sen. Jamie Eldridge, an Acton Democrat whose district includes Devens, Ayer and Harvard. He’s encouraging affected Evergreen employees to contact his Statehouse office at 617-722-1120 or via e-mail at James.email@example.com.
“I’ve been in touch with the Office of Labor and Workforce Development to make sure these employees get the support they need and any benefit they can get due to this layoff,” said Eldridge. “Beyond that, I’m incredibly disappointed with Evergreen Solar and I think it underscores to me the need for the governor and Legislature to take a hard look at the strategy of offering large tax breaks to companies.”
“We need to be able to first discuss whether this is a wise economic-development strategy, but second of all if we’re giving them out, we need stronger claw-back provisions to get our tax dollars back” when there is a failure in promised performance, Eldridge said.
Eldridge said he filed last year, and will refile this year, a bill to allow the state to have a greater ability to recoup its investment.
Eldridge said the company did reach its employment goals for the first two years “but obviously they’re not going to reach next year’s. There are some claw-back provisions but the state, including MassDevelopment, have invested more than $60 million in this company and I think we need to have a better ability to get back most of that money.”
A request for direct comment from MassDevelopment officials, charged with the redevelopment of Devens, was deferred to the state Department of Housing and Economic Development. The landing of Evergreen Solar on Devens was much touted as a major success story in the repurposing of the former Army base.
Housing and Economic Development Secretary Greg Bialecki, who serves as the chairman of the MassDevelopment board of directors, said the company has worked hard to compete against heavily subsidized foreign competition and to live up to its commitments to the state.
“For our part, we must now ensure that impacted workers receive the resources they need to make successful transitions,” Bialecki said.
Evergreen, which had been a cornerstone of Gov. Deval Patrick’s clean-energy agenda, expects to pay $15 million for employee severance and other costs required with closing the facility.
House Minority Leader Bradley Jones said Tuesday the plant’s closing should serve as a lesson to Patrick, as well as Lt. Gov. Tim Murray, that “throwing money at companies in industries he approves of won’t necessarily translate into success.”
“Instead of focusing on stimulating one particular industry, Gov. Patrick and Lt. Gov. Murray should turn their attention to creating an economic climate where all businesses can succeed and thrive,” said Jones in a statement.
Patrick had heralded Evergreen as key to the state’s economic future in clean energy.
Bialecki tried to find a ray of sunshine amid Monday’s news, citing figures from a Massachusetts Clean Energy Center survey that found that even without Evergreen, the clean-energy sector in Massachusetts is growing strong. The survey shows that the number of clean-energy jobs statewide grew by 50 percent from 2007 to 2010, from 6,400 jobs to 10,100.
Evergreen has not said what will happen to the solar-panel assembly work at Devens, but the company will continue operating manufacturing facilities in Midland, Mich., and Wuhan, China.
“It has been an interesting ordeal,” said Janice Perry, a Harvard abutter to the Evergreen Solar Devens plant. “Interesting that there is no mention of the noise problems they caused.” Perry and several other homeowners on Old Mill Road, who are effective abutters to the round-the-clock factory operation, had attended a year and a half worth of Devens zoning meetings to be heard about high and low frequency noise and vibrations that had come to affect their wellbeing.
The sound saga was silenced this fall with the encapsulation of exterior factory equipment behind sound muffling walls. Since then, neighbors have been able to happily report relief from the din. Perry turned her concern to the Evergreen workforce affected by Tuesday’s announcement. “I feel very sorry for the poor workers who will lose their jobs.”
“It is very disappointing to see the loss of 800 jobs and to see another Devens facility close its doors.” agreed Harvard Selectmen Chairman Peter Warren.
Harvard selectmen became involved in the border dispute in 2009 and later on several occasions, trying to broker a deal among the Commission, former Evergreen Solar CEO Richard Feldt and affected constituents. The fix came more than a year later after the company’s investment of more than a $1 million to first monitor the soundscape over several months, the installation of a 2009 first round, and then a 2010 second round of noise squelching improvements and walls around the rear of the plant.
“I am somewhat surprised, especially since they had recently invested all that time and funds on the noise issue,” said Warren. “I thought if they we going to leave, they would have done that before making that investment.”
The Devens towns are buckling down for a rocky coming fiscal year. Shirley Selectmen Chairman Kendra Dumont said the layoffs won’t bode well for the surrounding towns. “We do need green technology and all of that but right now we’re hurting. Look at how much that could help cities and towns right now.”
Shirley is launching into its fiscal 2012 budget preparations and awaiting the local-aid figures. “We’ve heard between 5- and 10-percent cuts in local aid. It’s just mindboggling to me as to how these cities and towns will keep making it,” Dumont said.
Shirley has just formed a tax committee to investigate the revenue outlook. “We’re looking to collect back taxes and more and more people are losing their jobs. I’d image those 800 jobs were local jobs. How many people were traveling from far way to work at Evergreen? It’s just going to hurt the cities and towns more.”
The public investment in Evergreen Solar has long agitated Still River resident Deborah Skauen-Hinchliffe. “In my opinion, we need to hold Gov. Patrick directly responsible to repay every cent of the upward of $78 million that have reportedly been doled out to Evergreen.”
“The co-founder of Evergreen was one Mark Farber, who was reported to be on Patrick’s transition team. This does not and never has passed the smell test,” Skauen-Hinchliffe said. Requests for a reaction to the statement from the governor’s office were not returned as of Wednesday.
Ayer Selectman Frank Maxant said the news of Evergreen Solar’s Devens closure is symptomatic of a lack of leadership at MassDevelopment, where deals are rushed into “to make themselves look good.”
“They don’t even know what sustainable development means. A business cannot be sustainable that’s making basically a commodity product, which solar panels are, in a production process that’s relatively labor intensive, which their production process is — and they’re in the global market– where you’re paying your workers per hour what other countries are paying them each day,” said Maxant. “And yet that’s what Evergreen Solar is and that’s what the governor pronounced as the model for the state’s financial future.”
Asked how he thought the building should be repurposed, Maxant jabbed, “I think the highest and best use for that huge building is the world’s largest gymkhana course.”
Eldridge said blame is split at the state level. “The big issue here is that the Legislature and the governor made a decision that they’d spend tens of millions of dollars to bring big companies like Evergreen Solar to Massachusetts. But is that money best invested in private companies or better used for local aid, education, investment in infrastructure, local aid or health care?”
“It’s not about whether or not Evergreen Solar is an alternative energy company,” said Eldridge. “Is that the best way to spend our money?”