The world leader in thin film solar panels, First Solar, announced a restructuring plan as the American company has to cope with deteriorating market conditions in Europe.

Under this program, First Solar intends to dramatically reduce manufacturing costs while redeploying its organization on “the most promising markets.”

The company initially decided to close in the fourth quarter of 2012 its manufacturing plant in Frankfurt (Oder) in Germany. Then, it said having to reduce its production capacity in its manufacturing center in Kulim, Malaysia, where four production lines will be adopted from 1 May 2012.

In total, the firm expects strong workforce reductions in Europe and the United States: “2,000 jobs will be affected, about 30% of total group workforce.”

By these measures, First Solar expects to reduce operating expenses by 30 to 60 million in 2012 before reaching the years 100 to 120 million economy. First Solar expects therefore to improve its average cost of production: from $ 0.70 to $ 0.72 per watt this year instead of $ 0.74 per watt previously announced. In 2013, the Company estimates that the average cost of manufacturing solar modules will be established between $ 0.60 and $ 0.64 per watt. The company also said it will incur restructuring costs (provisions and expenses) of approximately 245 to $ 370 million.

“After careful analysis, it is clear that the European market has deteriorated to the extent that our operations there are no longer economically viable, and that their maintenance is not in the long term interest of the shareholders” said Mike Ahearn, CEO of First Solar. “Decisions like this are not easy to make, especially given the importance of European markets” he added.

“The solar market has fundamentally changed, and we must adapt our approach to the market quickly to maintain and build on our competitive advantage,” said Mike Ahearn. “After a period of robust growth, First Solar has been sized to operate at higher volumes at present where the reduction of subsidies in traditional markets to significant downside. Therefore, it is essential that we reduce the production and expenditure in order we adjust to future demands which will probably be lower. These actions will focus our resources on markets that generate growth in the coming years.”

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