A San Jose-based company has pulled out of plans to build a multimillion-dollar solar cell factory in Saginaw, Mich.
GlobalWatt CEO Sanjeev Chitre blamed the shutdown on the poor economy and competition from overseas; however, many critics are wondering if there really was much of a factory to shut down. Far from a mega-factory promised in early paperwork, GlobalWatt's Saginaw operations actually employed slightly more than a dozen workers.
GlobalWatt promised the small Michigan town jobs in exchange for state and city tax credits potentially worth tens of millions of dollars. Paperwork publicized by the group Mackinac Center for Public Policy show GlobalWatt claimed Texas had offered the solar company a competing tax credit plan -- presumably to pressure Michigan into meeting or exceeding the offer. However, the center's fiscal director says "We [now] know that to be false."
Says Mackinac Center's Michael LaFaive: "Now we know [the state of Michigan] did not really look too deeply into the matter. You know, I discovered these inconsistencies between what was said on the application and what we now know to be true, simply with a few phone calls to Texas and a Google search. The data was available -- all you gotta do is look for it."
GlobalWatt did not respond to the Mackinac Center's claims, but the CEO of the company did talk to NBC Bay Area.
"We did not get a single cent from the city of Saginaw or the state of Michigan," said GlobalWatt CEO Sanjeev Chitre. He defended the small size of the plant in Saginaw, saying "at least a thousand" solar panels were built before the shutdown. Chitre said the company no longer needed the massive facility as the American solar industry faced low-cost competitors in China and Europe. "We were paying between five and seven thousand on electricity every month for the large facility," Chitre said.
The mayor of Saginaw confirmed the company did not collect on any state or city tax breaks.
Michigan was very excited about GlobalWatt's promises of a $177 million plant. "In fact, GlobalWatt literally left Silicon Valley in California to set up shop in an abandoned auto plant in Saginaw" enthused [then] Governor Jennifer Granholm in her state of the state address. The town newspaper wrote of Saginaw's "solar flair."
The Michigan Economic Development Corporation once estimated the GlobalWatt facility could have generated a total of 2,768 direct and indirect jobs by 2016 - a far different number than the dozen-plus who actually ended up working shifts. The development agency has been under fire for several other wildly high estimates on projects that did not turn out.
In its application for tax breaks and grants, the company wrote "it is the intent of GlobalWatt to serve as an anchor for the City of Saginaw to develop [its] industrial sector as a renewable energy industrial area".
Certainly the Solyndra disaster factors in any solar venture. "Companies like Solyndra have dried up capital," said Chitre. "Solar is a bad word."
Fremont -based Solyndra did make the sort of mega-facility GlobalWatt envisioned, only to shut down a few years later. Though unlike Solyndra, says a past business partner "these guys [at GlobalWatt] aren't doing anything innovative. Nothing fancy." The person asked not to be named, concerned about future business deals. "We had to eat a bunch of legal fees and travel expenses" after deals with GlobalWatt "died on the vine" the supplier said.
There's no question GlobalWatt presented itself to the state of Michigan as a Silicon Valley company large enough to stimulate the local economy and turn around a region of the country beset with layoffs and economic malaise. The company said it expected to initially offer at least 500 jobs at an average hourly wage of $15.57.
GlobalWatt's website shows a seven story gleaming building (pictured right) in what appears to be a downtown area with the words "corporate headquarters 2680 North First Street Suite 215 San Jose."
In fact the company's headquarters (pictured below) is located above a dentist's office in a low slung brown edifice in one of Silicon Valley's many office parks. Chitre says he does not know what the building pictured on the website actually is. "I think it is a solarized building. It doesn't say its our headquarters [specifically]."
While the company claims on its website it sells "mobile power systems, water filtration systems" and "disaster relief kitchens," its not immediately apparent as to how to purchase any of those devices, though the CEO assures NBC Bay Area the products are available. Bloggers point out GlobalWatt once sold 5 solar cell assemblies on eBay, but they were not manufactured by GlobalWatt.
Chitre says some of the jobs lost by Saginaw will actually return to Silicon Valley as GlobalWatt opens a new facility. One that Chitre is quick to point out will be very small, though he declined to give numbers. Might it employ a dozen? he was asked. Probably not, he said. "You have to manage these things."
The facility will be located in Fremont, not far from Solyndra.