Advanced Energy realigning manufacturing operations and reducing workforce

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Lacking real details, Advanced Energy is shifting certain component assembly operations from the US to China as part of a wider cost reduction program instigated by its recently appointed new CEO, Garry Rogerson. Some of its solar inverter subcomponents assembly work will shift to its factory in Shenzhen, China, while final assembly and testing of solar inverter products would remain close to end markets. AE did not disclose how many jobs would lost in the restructuring, which was estimated to cost approximately US$2.5-US$3.5 million, initially.

“After two months at Advanced Energy, I continue to be impressed with the company's strong leadership in the power conversion market,” said Garry Rogerson, chief executive officer. “The currently challenging environment in the end markets served by both the thin films and solar business units has prompted us to move forward on implementing our long-term strategic plan, which will be discussed at our upcoming analyst event. The initiatives announced today position us closer to our customers in high growth markets worldwide. We expect this will contribute to greater profitability and flexibility during the cyclical peaks and troughs of the thin films business. This will better position us to invest in strategic growth areas and remain at the forefront of the industry.”

According to Avian Securities, financial analyst, Mark Bachman the company was shifting manufacturing away from facilities in Colorado and Oregon to China as smaller subcomponent assembly was labour intensive. As inverters for utility-scale markets are large and heavy, Bachman expects final manufacturing to remain close to end-markets. Bachman said that AE employed 1,788 at year-end 2010.

AE noted that it would provide more details of the restructuring in late November, during a financial analyst event, after third quarter financial results would be announced.
 

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