Renewable Energy Corp., which employs 294 people at its plant southwest of Butte, laid off 26 local employees Wednesday.
It is part of a company-wide workforce reduction of 60 employees, which includes sister plants in Houston, Texas, and Moses Lake, Wash. The company blamed market weakness and an ongoing complex trade war between the United States and China for the layoffs.
The Butte plant employees were not given notice, Rich Green, REC director of operations, told The Montana Standard Wednesday afternoon. The layoffs went into effect immediately.
“We gave every employee a severance package that is not required, plus two months of COBRA insurance package,” said Green. “We’re very sympathetic to this. It was a very difficult decision for us. We tried to set people up for some time to go out and look for work. I know it’s tough in this economy.”
Positions were cut in a variety of departments, including polysilicon production, silane (gas) loading, maintenance, product handling, sales, administrative and general areas, said Green. Sales, administrative and general departments serve as overall support for the entire plant.
Employees cut included a few polysilicon engineering positions, but Green would not say how many. He estimated that REC employs about 30 engineers.
The Norway-based corporation makes solar and silicon products for the solar grade and electronic grade polysilicon commodity markets.
The Butte plant, located five miles southwest of town, makes polysilicon and silane gases for the electronics market. Silane gases are used in semiconductor, flat screen displays and thin-film technologies.
In a posting on its website, the company attributed the work force reduction, in part, to continued market weaknesses.
“The reduction in the work force is the result of very weak electronics, silicon and solar markets,” said Green. “All the polysilicon markets are very weak right now. To me, it’s the natural economics of the world economy. When the economies of the world aren’t doing well, the electronic industry isn’t doing well.”
The loss of 26 REC jobs comes on top of recent Denny’s Restaurant and 4-B’s Restaurant closures in Butte.
“This is never good news for the community when one of your major employers has to lay off people,” said Jim Smitham, Butte Local Development Corp. director.
“In this instance, it’s 26 people who live in our community and who buy products in our community, so those jobs will be missed,” Smitham added. “It will definitely have a ripple effect. You hope that they can find work in the community and stay here.”
The statement on the company website also attributed the layoffs to “continued uncertainty from the prolonged solar trade war between the United States and China.”
An ongoing complex trade war between the United States and China, which imposed a 57 percent tariff on polysilicon imports – mostly on products made in Butte and Moses Lake – is partly to blame. China retaliated with the tariff after the U.S. placed an initial duty on silicon exports. Solar panels are one of many products made of polysilicon.
“We’re working closely with the U.S. government and our U.S. representatives to try to get a resolution to this,” said Green.
Meanwhile, although work will be spread out among the remaining employees, steady production will continue, Green said.
“We plan to run our plants full out,” Green added. “We’ve just had to reduce costs to maintain competitiveness.”
“Hopefully, the U.S. government will get it rectified and back on a level playing field so REC cannot feel the effects of an international trade war,” said Smitham.
Despite the sudden loss of jobs, Smitham remains optimistic.
“We hope that they get this international trade war squared away so the market can get turned around and these jobs can get reinstated,” said Smitham.
REC started in 1996 in Norway. Last August, when the Norway headquarters split its solar and silicon divisions into two independent-listed companies, Bloomberg reported REC’s value at $133.3 million.
“This decision wasn’t taken likely,” Green said of the sudden layoffs. “But it was necessary in order to maintain competitiveness in uncertain periods. We’ve had to reduce costs in order to maintain competitiveness.”
— Reach reporter Renata Birkenbuel at Renata.firstname.lastname@example.org and (406) 496-5512.