On Friday, BP (formerly British Petroleum) announced it would be closing its solar panel manufacturing plant in Fredrick Maryland, while leaving its sales office, project development and R&D facilities in place. At first glance, this looks like a standard case of offshoring of manufacturing, as the first sentence in the
Washington Post story noted that this was: "the final step in moving its solar business out of the United States to facilities in China, India and other countries." A closer look at the story reveals some more interesting information. For example, the Post story notes that BP "was producing 125 millimeter multi-crystalline solar cells in Frederick while the rest of the industry had moved to 156 millimeter cells, which have become standard." The story goes on to note that BP Solar's CEO Reyad Fezzani said that changing the production lines would be too expensive.
This, to me, is the real story. The Frederick plant is decade years old -- so old that according to the Post story "The company, unable to sell or lease the building, will tear it down." This raises a set of questions and issues -- mostly around why BP didn't feel the need to continually upgrade the plant. If they think there is a business case for simply scraping the facility, why is there not a business case for building a new facility in the same location? After all, there is already a trained workforce. The answer may be in another quote from the story:
In the world of historic preservation of buildings there is a term "demolition by neglect." It describes the process where an owner wishes to tear down a building (usually to replace it with something much larger and more profitable) but can't. The solution is to simply wait until the building is in such poor condition that demolition is the only alternative.
I have to wonder if the story of the Frederick solar manufacturing plant is a case of offshoring-by-neglect?
This, to me, is the real story. The Frederick plant is decade years old -- so old that according to the Post story "The company, unable to sell or lease the building, will tear it down." This raises a set of questions and issues -- mostly around why BP didn't feel the need to continually upgrade the plant. If they think there is a business case for simply scraping the facility, why is there not a business case for building a new facility in the same location? After all, there is already a trained workforce. The answer may be in another quote from the story:
"We remain absolutely committed to solar," BP chief executive Tony Hayward said in an interview Friday. But he said BP was "moving to where we can manufacture cheaply."Sounds to me like BP has been ambivalent toward this plant for some time. According to the Gazette, BPO had laid off 140 assembly line workers last year while also looking for government grants to update the plant.
In the world of historic preservation of buildings there is a term "demolition by neglect." It describes the process where an owner wishes to tear down a building (usually to replace it with something much larger and more profitable) but can't. The solution is to simply wait until the building is in such poor condition that demolition is the only alternative.
I have to wonder if the story of the Frederick solar manufacturing plant is a case of offshoring-by-neglect?
Leave a comment