Maxeon Solar, pledging a $1 billion investment and 1,800 jobs and subsidized to the tune of $600 million in cash and incentives from state and local governments plus millions more from the feds Inflation Reduction Act, continues to crash and burn on the US stock market.
Tuesday Maxeon management warned that it can no longer offer any guidance about its financial future.
Maxeon was down 21 percent in Tuesday's trading (at 8 cents a share), approaching the lowest (ever) after reporting Q2 revenues of $184 million, down 47% from the prior-year quarter, and saying it expects Q3 revenues will "decline significantly" due to "intense competitive pressures, subdued distributed generation market demand, project delays and order cancellations. . . and an unpredictable policy environment." Maxeon (MAXN) said it is no longer able to provide financial guidance for Q3 and is withdrawing full-year guidance for revenues and is not conducting a conference call to discuss Q2 results.
We warned of possible trouble ahead when on August 13 of last year Gov. Lujan Grisham and ABQ Mayor Keller announced Maxeon's plan to manufacture solar panels here. The stock crashed 32 percent on that very day.
And in that blog we also reviewed the many failed solar development efforts for Mesa del Sol preceding Maxeon, including the flame-out of Schott Solar and Advent that cost government here oodles of dollars in tax incentives.
And now there's been further reporting on the possible collapse of Maxeon's plans as economic planners helplessly stand by awaiting a final outcome.
Maxeon still has a slice of hope of recovering. Ironically, the Singapore-based firm has now essentially been taken over by a Chinese company that is pumping millions into their reserves. Ironic because it is the dumping of low-cost solar panels by China into the US that has been hammering solar manufacturing.
But that Chinese backing could be a problem for Maxeon as it awaits approval for a nearly $2 billion loan from the US Department of Energy to build the ABQ manufacturing plant. Without that loan Maxeon will get a gravestone next to Advent and Schott on the south ABQ mesa.
DUMPED AT THE ALTAR?
I have to say we've been so burned by these companies (in the past). . .We are just dumped at the altar all the time. What's changed is the Inflation Reduction Act. . . These companies that manufacture in Asia. . . it now subsides them to manufacture in America especially for green products like solar panels. . .All these companies are trying to move back to America and we have a thesis about (ABQ) being a manufacturing, renewable energy hub. . .It was just too expensive for them to take advantage (of what the city offers). We've been positioned to win this fight for decades but now we can deliver because of that Inflation Reduction Act.
That said, I really am not going to celebrate until there is a shovel in the ground. We've done everything as a city. . . So it's all up to the company. If they go bankrupt they're not going to come. But we now have two. The scale is so big. . . if one of the two (companies) actually does what they say they are going to do that is the same amount of jobs and infrastructure as when Intel came in the 80's and that literally created modern day Rio Rancho. Now that there are two irons in the fire I gotta believe that one is going to work.
New Mexico's romance with borderline companies that demand massive taxpayer subsidies in exchange for coming here is legendary and a poor substitute for true economic development. Maybe at least there will be a valuable lesson learned if these latest solar examples flame out. But judging by the past, maybe not.
POLITICO PRESIDENTS
Reader Frank chambers writes of our Tuesday blog reporting on Public Education Secretary Arsenio Romero stepping down to pursue the presidency of New Mexico State University:
Joe, Indiana Gov. Mitch Daniels was selected as Purdue President by a board mostly of his appointments. Burns Hargis stepped down from the Oklahoma State Board of Regents to be appointed president. A rule that one had to be off the Board for one year was waived. That's bad news for education all around, including Romero's case.
Romero served on the NMSU Board of Regents before becoming Sec. of Education.
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