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We make silicon wafers that go into solar panels. In 2008 we decided to build a plant in Massachusetts to be near our research and development facility. There was a groundswell of optimism that the U.S. was going to take the lead in the drive for alternative energy.
There were challenges from the start. Lehman Brothers was our banker and had almost a third of our outstanding shares as part of a financing transaction. That disappeared in Lehman's bankruptcy and cost us about $300 million. Then we went to the federal government to get help from the TARP funds, but they said no because we weren't a financial institution.
In December 2008 we were approached by a Chinese company, Jiawei, which was impressed with our wafer technology. The Chinese government agreed to support a loan that would cover two-thirds of our expansion in China. The subsidies we received from the government here covered less than 5 percent of the cost of our U.S. plant. We received $20 million and some future tax credits, but you can't pay taxes if you don't make money.
One mistake was making the U.S. facility too large. We should have made it a quarter the size. I wrote to the governor of Massachusetts, and we went to everyone we could think of—Congress, our banks. Nobody could help us. Then, late last year, prices went down 10 percent in one month for the modules we sell—on top of steadily falling prices for the last three years. That left us no choice but to stop making panels in the U.S. and shift our focus to making wafers in China. The access to capital for startups there is staggering.
About 800 people in our U.S. factory will lose their jobs, but the company wouldn't have survived if we didn't make this choice. Now we'll focus on what we do best. If we had stayed here, we would have been insolvent by September. We needed to do this to survive, although my hope is that some day more jobs will come back here.