The job cuts are part of a restructuring plan to decrease the cost of its solar energy products by moving in-house manufacturing to its low-cost joint ventures and regional supply partners as the cost of solar power continues to fall, BP Solar said. About 110 jobs in sales, marketing, research and project development will remain in Frederick.
“This was a difficult decision and we deeply regret the impact it will have on our employees and the community. We have a long history in Frederick and I am thankful for the support of all our colleagues, the community and local, state and federal officials,” Reyad Fezzani, CEO of BP Solar, said in a statement.
The company’s announcement, which came Friday, was “a big hit” to Frederick’s economy, said state Sen. David Brinkley, R-Frederick.
“They’re obviously going to be making the solar cells somewhere, but they’re choosing physically to relocate and not be here, and that’s indicative of, I guess, the environment — the business environment and the economy,” Brinkley said.
BP Solar began cutting back its 600-person work force in Frederick last year when it decided to shift its focus from manufacturing solar panels to designing and installing utility-scale solar facilities, outsourcing the production jobs to Europe.
The company also halted plans to build a $100 million addition to the plant in February 2009 because of global competition. It had spent $30 million on the partially built facility, which it said it would dismantle in December after it failed to find a buyer or tenant.
“I understand that future BP products will be manufactured exclusively overseas through existing joint ventures at plants in India and China and from new suppliers in Mexico and Poland. Just a few short years ago, we were looking forward to an expansion that would have doubled the size and number of jobs in Frederick,” U.S. Rep. Roscoe Bartlett, R-Md., said in a statement.
“It’s devastating to get this news after watching the partially constructed new facility dismantled,” he said.
Closures to BP Solar’s manufacturing locations worldwide began in the first quarter of 2009, helping the company to reduce its unit costs by more than 45 percent.
Fezzani said that solar panel prices have dropped between 40 percent and 50 percent since the financial crisis began. That made the cost of solar power competitive with other electricity sources.
In a statement, Gov. Martin O’Malley said BP Solar had informed his staff of its restructuring plans Thursday, and that he had directed teams from the Department of Business and Economic Development and the Department of Labor, Licensing and Regulation to reach out to the many employees affected by the layoffs.
“These state agencies will work closely with local officials and representatives from BP Solar to make sure impacted workers have access to all available resources, unemployment insurance, and job training,” he said.?
BP Solar said all eligible employees will receive full pay and benefits for three months, followed by severance packages and help locating new jobs.
Solar-cell manufacturing in Frederick dates to the mid-1970s, when Hungarian expatriates Joseph Lindmayer and Peter Varadi established Solarex. The company, housed in the plant topped by a huge, slanted, solar-panel array, became the nation’s largest U.S.-owned solar cell producer by 1994, when then-owner Amoco Corp. sold a 50 percent share to Enron Corp.
BP acquired Amoco in 1998 and bought Enron’s share a year later.
The Associated Press contributed to this article.