36 / 88
EuroWire – January 2011
34
Transat lant ic Cable
On another positive note for the US economy, gross domestic
❈
❈
product (GDP) expanded 2% in the third quarter, topping the
1.7% growth of the April-June period. Economists surveyed
by
Bloomberg News
predicted a 2.4% expansion for the
fourth quarter.
Improved job numbers enable
California to celebrate its first month
of economic recovery
California is badly in need of good economic news – and in
November its residents at last received some. It was reported
that the state added 39,000 jobs in October, across many sectors.
While the unemployment rate was unchanged at 12.4%, the gain
was sufficient to persuade economists that the recovery in the
Golden State may be building up steam. As reported by Alana
Semuels in the
Los Angeles Times
, the October data represented
a major improvement over September, when payrolls declined
by 53,600 jobs. The state’s struggling labour market had seen
the biggest monthly employment increase in some three and a
half years. (“California Posts Biggest Job Gain Since May 2006,”
19
th
November)
Among the gainers substantiated by the California Employment
Development Department were manufacturing (7,100 jobs) and
even the weak construction sector (2,500 jobs). Another positive
sign for the labour market was the rise in the average hours
worked per week from 39.9 in September to 40.4 in October.
Even so, as noted by Ms Semuels, California’s “employment hole”
remains huge. The state still has 1.3 million fewer jobs than it did
at its peak in July 2007. Key sectors including housing continue
to struggle. But Californians were inclined to put the best
possible construction on the recent job numbers. Esmael Adibi,
an economist with Chapman University in Orange, told the
Times
: “This is, relatively speaking, the best news we’ve gotten
this year. We have bottomed out and we are creating jobs.”
Jerry Nickelsburg, senior economist at the Anderson School
of Management of the University of California, Los Angeles,
concurred. “Our losses are starting to become smaller,” he told
the
Times
; then added, “We’ve got some climbing to do.”
While California demonstrated the most dramatic
❈
❈
improvement of the four biggest states, the next three in
line – Texas, New York and Florida – all added jobs in October
as the US economic recovery stoked demand for labour.
Texas gained 47,900 jobs; New York, 40,500; Florida, 6,900.
Goldman Sachs Group Inc, the investment banking and
securities firm, said on 20
th
November that the gains could
help the states to shrink budget deficits as new jobholders
boost income- and sales-tax collections. States’ tax revenue
grew about 6% in the three months ended 30
th
September,
the third consecutive increase.
At the national level, employment in the US rose in October
❈
❈
for the first time in five months, the Labor Department
said 5
th
November payrolls climbed 151,000, exceeding all
estimates in a
Bloomberg News
survey of economists.
Energy
Innovative technology is not enough
to save a US maker of solar panels from
the vicissitudes of the market
“The cost-cuttingmove, which will reduce the company’s previously
announced production capacity, is a sign of the notable shift in the
prospects for cutting-edge American solar companies, which now
face intense price competition fromChinese manufacturers that use
more established photovoltaic technologies.”
Todd Woody, who writes the “Green” blog in the
New York Times
,
was referring to Solyndra, a Silicon Valley solar panel maker that was
aided by Washington to build a state-of-the-art robotic factory. On
3
rd
November the company announced an alteration in its plans for
that facility and another one. Just seven weeks previously, Solyndra
had opened Fab 2, its $733million factory in Fremont, California. The
plant was intended as the first phase of a rapid expansion. Instead,
Solyndra will shutter the old plant and postpone the expansion of
Fab 2, which was built with a $535 million federal loan guarantee.
In an interview in San Francisco, Solyndra’s chief executive Brian
Harrison sounded very much like someone who had spent time
between a rock and a hard place. “Fab 2 is much more efficient and
cost-effective than our existing facility. We’re adjusting our plans to be
more in line with where the market is and where our business is at the
moment.” The necessity for that adjustment became apparent over
a mere six months from December 2009, when Solyndra filed for an
initial public stock offering. At the time it projected a total production
capacity of 610 megawatts by 2013 if its two plants were fully built
out. Plans for the stock offering were abandoned in June 2010.
The company nowexpects tohave capacity of 285 to300mWby 2013.
After Solyndra filed for the stock offering, the market underwent
a significant shift. Prices of solar modules plummeted as low-
cost Chinese manufacturers like Suntech and Yingli Green
Energy ramped up production. Mr Woody wrote that this has put
pressure on companies like Solyndra, which makes advanced
thin-film solar modules. These had been cheaper to install until
prices began to fall sharply last year.
Solyndra could reopen the old factory, Fab 1, or expand its
❈
❈
successor. The closing of Fab 1 will save more than $60 million
in capital expenditures. And according to Mr Harrison,
despite the cutbacks Solyndra’s production of solar panels for
commercial rooftops will double in 2011 from 2010.
Suntech is China’s biggest solar panel maker, with head-
❈
❈
quarters in Wuxi. Suntech America, based in San Francisco,
opened a facility in Goodyear, Arizona, in 2010. Production
there enables the Chinese company to avoid tariffs on
imported solar panels imposed by the US.
The Chinese solar module maker Yingli Green Energy (Baoding),
which has offices in New York and San Francisco, is also believed
to have a Phoenix operation under consideration.
Dorothy Fabian
USA Editor