SolarWorld gets tax breaks while dumping union workforce
The German-owned company will get nearly $43 million in tax breaks and subsidies, while cutting
family-wage union jobs in Vancouver and hiring lower-paid nonunion workers in Hillsboro
By DON McINTOSH
Associate Editor
Two dozen union workers were
laid off last month from a SolarWorld
silicon ingot factory in Vancouver,
Washington. Next Friday, 27 more
will be let go. But it wasn’t recession
or foreign competition that killed
their jobs. Rather, SolarWorld is pro-
gressively downsizing its union work-
force while aggressively ramping up
employment at a new nonunion facil-
b h
m k
ity in Hillsboro, Oregon — for which
the company is getting nearly $43
million in tax breaks and other public
subsidies.
German-headquartered Solar-
World, one of the world’s largest solar
energy companies, acquired the Van-
couver plant and another in Camar-
illo, California, when it bought Royal
Dutch Shell’s solar division in 2006.
The Vancouver workers had been rep-
resented by Machinists Local 1432
Bennett Hartman
Morris & Kaplan, llp
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since the 1980s. SolarWorld promised
there’d be no job cuts for a year.
Then in March 2007, SolarWorld
bought a 480,000-square-foot silicon
chip factory in Hillsboro from the Ko-
matsu Group. SolarWorld paid $40
million for a factory that had cost Ko-
matsu $472 million to build, and an-
nounced it would spend $400 million
to turn it into the largest solar wafer
manufacturing facility in North
America. The company employed
mostly union building trades subcon-
tractors on the changeover, and the
Hillsboro plant opened on schedule in
October 2008.
Would the company’s own work-
ers be union as well? When Machin-
ists District Lodge 24 Business Rep-
resentative Scott Lucy met with
SolarWorld last summer to negotiate
a new contract, he hoped the com-
pany would agree to remain neutral
toward any future efforts by its new
Hillsboro workers to unionize. Solar-
World rejected that proposal.
It also demanded concessions, in-
cluding elimination of the severance
benefits that workers would get if laid
off. Members voted Nov. 2, 2008, to
authorize a strike, for the first time
ever. But at length they agreed to a cut
in severance pay — from three weeks
pay for every year of service to one
week.
On Jan. 27, SolarWorld announced
52 permanent workers and 11 temps
in Vancouver would be laid off in
March and April 2009. A skeleton
crew of about eight would remain to
recycle scrap silicon.
Workers were told they could apply
for jobs at the Hillsboro site — 32
miles away. But those would be non-
union, at-will jobs, with lower pay and
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benefits and none of the union job
protections; work shifts would rotate
every other week between 12-hour-
long graveyard and 12-hour-long day
shifts; and if they took jobs in Hills-
boro, they would lose their severance
pay. Only a half-dozen accepted jobs
at the new plant, Lucy said.
SolarWorld spokesperson Anne
Schneider wouldn’t tell the Labor
Press what Hillsboro production
workers are paid, other than to say it’s
“competitive.” But Vancouver work-
ers say they were told to expect $11 to
$13 an hour. That compares to $12.24
to $26.27 an hour under the union
contract, depending on skill and expe-
rience. Most of the Vancouver work-
ers made between $14 to $19 an hour.
If $11 to $13 an hour is the norm
at SolarWorld Hillsboro, that would-
n’t meet the conditions of its enter-
prise zone tax break.
Under a state program, companies
locating in designated “enterprise
zones” pay no property taxes for up to
five years on new equipment they in-
stall. For SolarWorld, that’s an esti-
mated tax savings totaling about
$11.5 million. The State of Oregon
asks almost nothing in return for that,
but local governments can put extra
conditions on zones in their jurisdic-
tions, and Hillsboro requires that at
least 75 percent of the jobs pay at
least double the Oregon minimum
wage, which is currently $8.40.
However, in satisfying that re-
quirement, the company can count
managers, and can choose not to
count temps. The temp agency Kelly
Services has been recruiting workers
for SolarWorld since at least last sum-
mer — and even set up a branch of-
fice at the plant. Schneider wouldn’t
say how many temps the company is
employing. SolarWorld has to submit
wage data to get the tax break, but the
information won’t be available to the
public, Hillsboro city officials said.
Are these the much-talked-about
“green jobs of the future” that politi-
cians at every level are eager to attach
themselves to?
Oregon Gov. Ted Kulongoski was
there with a prepared statement when
SolarWorld opened in Hillsboro:
“Oregon must remain aggressive in
developing economic opportunities in
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industries that will create high-wage
jobs and be in high demand for the
long-term — industries like renew-
able energy,” he said.
Kulongoski also directed the
Strategic Reserve Fund to make a $1
million grant to train SolarWorld em-
ployees.
All four solar manufacturers that
set up shop in Oregon since 2007 are
in enterprise zones, but the break on
property tax is the least of it. Oregon
has massively increased tax subsidies
and other supports for renewable en-
ergy in the last two years. In 2007, the
Legislature approved a 50 percent in-
come tax credit for renewable energy
investments of up to $20 million. Be-
cause Department of Energy practice
allows a 10 percent “cost overrun,” in
practice that meant wind farms, solar
arrays and solar manufacturers get up
to $11 million tax reduction per proj-
(Turn to Page 5)
Unemployment rate
skyrockets in Oregon
Oregon lost 14,000 more jobs in
March, pushing it’s unemployment rate
to 12.1 percent — one of the highest
rates in the country.
More than 256,400 Oregonians were
out of work last month, compared to
115,629 a year earlier.
The unemployment rate does not in-
clude workers who have used up all of
their unemployment insurance benefits,
or those who have found part-time jobs.
“(The) numbers tell us that we have
entered uncharted territory — that this
recession is not comparable to the re-
cessions before that we remember or
read about in history books,” said Gov.
Ted Kulongoski.
The trade, transportation and utilities
sector was down by 3,600 jobs last
month; manufacturing lost 2,100 jobs;
and jobs related to the wholesale trade
dropped by 800 jobs.
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NORTHWEST LABOR PRESS
APRIL 17, 2009