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Following closure of its crystal-growth plant in June and major loss in Q2, announced in August, Motech Industries, Taiwan's leading solar energy firm, laid off some 300 foreign laborers by revoking employment contracts ahead of schedule in mid-Sept., in an attempt to alleviate its financial straits via labor-cost reduction.
Motech pointed out that foreign laborers have been the priority target for the downsizing of workforce during the difficulty times, as they are supplementary manpower in nature, adding that it will do its utmost to assist them returning to their homeland or finding new employers, according to their wish.
Domestic media noted that another major reason for priority layoff of foreign laborers is lower severance pays, due to their relatively shorter service period.
A major culprit for the company's problem is drastic contraction of demands from the mainland Chinese market, following the promulgation of the 531 new policy in early June, which slashes subsidies for PV power and strictly restricts PV power station projects.
The new policy has gravely aggravated the plight of Motech, expanding its Q2 loss to NT$2.074 billion, compared with Q1 loss of NT$1.069 billion, as capacity utilization rate plummeted to 20-30%, boosting accumulated loss to half of its paid-in capital. At its Kuanyin plant in Taoyuan, reportedly only four of its 22 production lines are still in operation.
Faced with drastic shrinkage in demands, Green Energy Technology, a silicon-chip supplier, has also adjusted the work schedule of workers, asking them to take two-day leave after every two days of work, since late May. The company reported that the practice is provisional, expressing hope to resume the original schedule of two-day leave after four-day work once market situation recovers. SAS started to adjust manpower allocation in June, expected to last half a year, transferring excess manpower at the PV power section to semiconductor section.
To cope with the gloomy market situation, other Taiwanese solar energy firms have cut output, diversified businesses, or switched to PV power systems.
(First photo courtesy of Google Map)