SALEM, Ore. -- A Salem solar plant that received millions in tax incentives will close after less than a decade in operation, with 92 employees losing their jobs.
Japanese electronics company Panasonic Corp. is closing its plant at 5475 Gaffin Road SE in east Salem. Production at the approximately 130,000-square-foot plant is expected to end in late October.
The Salem plant is closing because it's tied to a factory in central Japan. The factory Salem supports in Japan's Shiga prefecture, near Kyoto, is stopping production of solar cell modules by the end of March 2018 as the company moves in the Japanese market from creating the solar cell modules to solar cells.
“It's a change in competitive strategy,” Panasonic spokesman Jim Reilly said.
The Salem plant makes silicon ingots for the Shiga factory. But because the Japanese factory is halting production, there’s no longer a need for the ingots, Reilly said.
Sanyo Solar of Oregon opened its factory in 2009 to make wafers and silicon ingots for solar cells, receiving more than $42 million in taxpayer incentives to locate in Salem. Sanyo is a subsidiary of Osaka-based Panasonic.
Panasonic Eco Solutions Solar America LLC told the state of Oregon in a Sept. 6 notice it expects to start plant layoffs Nov. 6, with 86 regular and six temporary employees losing their jobs. The positions range from engineers to administrative staff.
"I regret that business conditions in our part of the solar industry have led to this action," Toshihiro Nomura, the company's president, said in the notice.
Some knew about the closure around two weeks before the Sept. 6 notice, said Darryl Gordon, the plant's vice president.
But last Wednesday evening, employees gathered in the main lunchroom at the Salem plant to get the news.
“There was obviously shock and disappointment,” Gordon said, adding he believes the staff understood what was going on and weren’t totally shocked.
Workers will get job-placement help and a severance. Gordon declined to provide details.
The plant has been slowly reducing the number of employees over the years. One of the first major layoffs, of 52 employees, came in 2013 as Panasonic decided to outsource work for wafer slicing.
Another round, this time of 50 employees, happened in 2016, with the company announcing a drop-off in demand for solar panels in the Japanese market.
Most of the more than $42 million in tax incentives for the plant came in the form of two $20 million Manufacturing Business Energy Tax Credits from the state.
Business Oregon spokesman Nathan Buehler said the company "exceeded" its end of the tax-credit agreement, which included employment and manufacturing requirements.
The plant needed to get up to and maintain 200 full-time equivalent positions over six years, he said. In the plant's case, a full-time equivalent job was a person who was paid for 2,080 hours a year.
Business Oregon is the state agency for economic development. The agency verifies employment numbers with reports from the Oregon Employment Department, Buehler said.
"This is a company that was in operation successfully for quite a few years," Buehler said.
The Panasonic plant is located in the Salem Renewable Energy and Technology Center, which is home to a Portland General Electric substation, too.
Companies are able to leverage Enterprise Zone status on the 80-acre site, meaning they can get between 3 and 5 years worth of property tax abatements.
In August, Amazon.com announced a roughly 1 million square-foot shipping and packing center will go in the nearby Mill Creek Corporate Center.
The Seattle-based company is set to receive more than $3.7 million in tax incentives for the distribution center.
Reach Jonathan Bach by email at firstname.lastname@example.org or by phone at 503-399-6714. Follow him on Twitter @JonathanMBach and Facebook at https://www.facebook.com/jonathanbachjournalist/.