Loss of Solar Jobs Has Mass. Rethinking State Aid

Originally heard on NPR

January 28, 2011
Tovia Smith (Journalist, NPR Radio)

Hundreds of employees of a solar panel factory in Massachusetts are looking for new jobs after the company announced that it's moving the plant to China.

Three years ago, Massachusetts wooed Evergreen Solar to locate in a former Army base in Devens that had been converted into an office park, hoping it would help boost the state's reputation as a hub for green industry. Now, many are second-guessing if and how government should be in the business of helping private business.

A Match Made In Heaven Breaks Up

On paper, it was a match made in heaven. Evergreen moved in and began to reap millions of dollars in fringe benefits, from tax breaks to free rent and cash grants. Evergreen grew from 100 to 800 employees. This month, the state woke up to what was basically a note on the kitchen table saying Evergreen was leaving.

"I was in shock for about a week," says Eric Grieman who works as a wafer fabricator at the company. "I have no clue what I'm going to do next."

"There was shock at every level," echoes Jack Burroughs, an environmental health and safety engineer, who got the news just one week after starting work at Evergreen. "I left a very good job in order to come here. I thought this was a more long-term career opportunity."

A Lack Of Federal Support

While many have directed their anger at Massachusetts for giving too generously to Evergreen, Burroughs says the problem may be that the manufacturer didn't get enough assistance at the federal level.

"I like the idea of the state supporting an industry such as this," he says. "But maybe there needs to be more federal support to help a company be successful."

Gov. Deval Patrick and Greg Bialecki, the state's secretary of housing and economic development, agree.

"We feel like we gave it our best shot," Bialecki says. "And I think, realistically, we have to talk about what role the federal government is going to play to keep manufacturing here and not to let it go overseas."

Evergreen's CEO Michael El-Hillow agrees, saying U.S. manufacturers cannot compete with companies in China that get far more government support.

He says Washington needs to do more to nurture fledgling industries, including changing government procurement policies to require buying American, and easing bank regulations and import duties that put American manufacturers at a disadvantage.

"It's also the role of government to make jobs for our citizens — our children," El-Hillow says. "That's their role. Or let's acknowledge that we're going to lose in the job creation stream."

But others scoff at the notion of a company that was given so much looking for even more. "It sort of has remarkable chutzpah," says Harvard University economics professor Edward Glaeser.

He says government should not be in the business of playing venture capitalist in the first place. And, Glaeser says, Massachusetts officials should have known better than to believe that a manufacturing plant could make it in such a high-cost labor market.

A New Review Process

Bradley H. Jones Jr., a Republican state representative, is one of many voices calling for a new review process for future government subsidies and incentives to private businesses.

He says the state was seduced by the lure of a sexy new industry.

"There was a leading with your heart and not your head," Jones says. Officials were all caught up in the idea that "this is going to put us on the map, and we're going to be green, green, green, and this is going to be great," Jones says. "And I think that served to cloud judgment."

'Get A Better Prenup'

Even Democratic supporters, like state Sen. James Eldridge, whose district includes Fort Devens, where the plant is located, are now expressing morning-after regret.

"I admit I was mistaken," Eldridge says. "I learned my lesson."

Perhaps the most important lesson, he says, is to "get a better prenup."

The state's contract with Evergreen does contain so-called clawbacks — some stronger than others. State officials concede their deal could have been tougher, but ultimately, they say they will recover most of their investment if one includes taxes that have come in, future benefits that will never be paid out, and the fact that the state still gets to keep roads and utilities that were built for Evergreen.

Officials say their costs should also be offset by the fact that hundreds of state residents had jobs through three really tough economic years.

But Harvard's Glaeser says it would be a big mistake to measure the state's energy policy by how it works as a jobs program.

"We need good energy policy," he says. "But the point of that policy should not be to maximize the number of employees. If we try to do energy and jobs together, I think we get neither a good energy program nor a good jobs program. "

In other words, Glaeser says, Massachusetts may have lost 800 jobs, but if the state's investment helps reduce long-term costs of green energy, then it's better to have loved and lost than never to have loved at all.