First Solar to cut 450 jobs at local plant

First Solar Inc. plans to begin producing what it considers to be a game-changing solar panel at its Perrysburg Township factory, a move that will bring millions of dollars in investment, but also lead to a substantial reduction in jobs over the next year and a half.

The Tempe, Ariz.-based company, whose only North American solar-panel factory is in suburban Toledo, said this week that it intends to phase out current products and significantly accelerate the launch of its Series 6 thin-film panels as it struggles to keep up with low-cost competitors.

The move, officials said, would require cutting about 1,600 jobs, about 27 percent of its 6,000 global work force.

The First Solar plant in Perrysburg Township employs 1,200 to 1,300 people. The company was founded in Toledo in 1986 as Solar Cells Inc. by the late Harold McMaster but later sold.
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On Thursday, First Solar revealed that 450 of those jobs would come from its Perrysburg Township plant. Separations are expected to start next week and wrap up by the end of the year. 

It is not clear whether any employees will be rehired when the new tooling and new product production is in place by mid-2018.

While the layoffs may be hard to swallow, First Solar spokesman Steve Krum said the company sees the local plant as an important part of its long-term plan.

“We’re investing $175 million in capital expenditures now and we’re building the first of several next-generation production lines here,” he said. “We remain committed to manufacturing in northwest Ohio.”

Mr. Krum said about two-thirds of the plant’s existing Series 4 production capacity will be taken off line this year in order to prepare the plant for the new Series 6 panels, which officials say are more efficient and up to 40 percent cheaper to manufacture.

The Perrysburg Township plant has between 1,200 and 1,300 employees.

Mr. Krum said about 200 employees will continue building First Solar’s current panels during the changeover. Another 600 employees who work in research and development, supply chain sourcing, customer support, IT, and other roles at the plant won’t be affected by the moves.

First Solar was founded in Toledo in 1986 as Solar Cells Inc. by the late Harold McMaster. In 1999, it was sold to True North Partners LLC and was renamed. The company sold public stock in 2006.

“Perrysburg has served as our center of excellence for research and development, as well as implementing manufacturing processes we share around the world,” Mr. Krum said. “We’re frankly quite proud to be looking to Perrysburg to lead the way in the new technology development.”

First Solar expects to have a financial loss this year of $2 to $4 a share on projected sales of $2.5 billion to $2.6 billion. 

After Wednesday’s announcement about restructuring its products and trimming 1,600 jobs, the company’s stock on Thursday finished down 5 percent, or $1.66 a share, at $31.16 on the Nasdaq.

First Solar CEO Mark Widmar said this week that full-scale production on the new line should be under way by the halfway point of 2018. The company plans a similar changeover at its plant in Malaysia and is considering starting up a plant in Vietnam that was built but never put into production.

Mr. Krum said the Perrysburg Township plant should be able to build 550 megawatts of production a year on the new line. That’s only 50 megawatts less than the current output in spite of taking up just two-thirds as much space.

While First Solar does expect local employment to rebound once the Series 6 line is up and running, officials don’t yet have a good handle on how many people they will need.

The company said employees whose jobs are cut will remain on the payroll for 60 days.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.