Solar panel maker retreats

US solar panel producer First Solar will shut down its newly built production sites at Frankfurt (Oder), an economically depressed eastern German city on the border with Poland.

The biggest American maker of solar panels, which has its headquarters in Tempe, Arizona, confirmed on Tuesday it would close its facilities there in the fourth quarter of 2012.

The Frankfurt (Oder) subsidiary currently employs 1,200 people. The planned closure of the facilities - which had been put into operation only recently, with a second plant added in the fall of last year, would mean a harsh setback for the regional government in the state of Brandenburg. For years, the state has been trying to help create viable long-term jobs.

Unfavorable market conditions

First Solar, like many other firms in the business, has been suffering from global overcapacities and much cheaper solar panels from China and India swamping the market. The company has also been confronted with dwindling subsidies for the solar industry in Germany.

The firm posted massive losses in 2011, with the first quarter of the current year not giving any signs for improvement. As a result, employers in Frankfurt (Oder) were asked to work on shortened schedules as of March 2012.

First Solar also reported it would drastically shrink its German distribution center in the western German town of Mainz and cut jobs in other European subsidiaries.

All in all, the company is aiming to axe up to 2,000 jobs and save between 100 and 120 million euros ($131 to 157 million) annually over the next couple of years.

hg/srs (Reuters, dpa)