Despite job loss, state OK with Evergreen loan

Such a shift may compromise Evergreen’s ability to create 170 “new jobs,’’ as promised in a loan summary distributed to MassDevelopment board members. The board, which voted in September to lend Evergreen money, is scheduled to meet today but an agenda shows members do not intend to discuss the company.

State Senator Mark Montigny expressed outrage, saying taxpayer money shouldn’t be given to a private company.

“MassDevelopment needs to immediately rescind the loan,’’ said Montigny, chair of the state Senate Committee on Bonding, Capital Expenditures, and State Assets. “If the marketplace can’t support this company, why should the taxpayer?’’

Evergreen has 700 full-time employees in Massachusetts, including about 577 at its Devens facility who make components called wafers and cells and also turn those parts into completed solar panels. Assembling solar panels in China, where manufacturing costs are cheaper, likely means fewer jobs at Devens, according to Evergreen. Company executives have not said how many local jobs they expect to lose. However, in a statement e-mailed to the Globe, the company said it “made a significant job commitment to the State . . . we have honored that commitment and will continue to do so. Massachusetts is the home of our global headquarters and our largest US manufacturing location and will remain a key focus of our company’s overall strategy.’’

“From their obligation to their shareholders, I totally understand what they are doing,’’ said Robert Culver, chief executive of MassDevelopment, which handled much of the public financial aid that helped Evergreen build its first large-scale manufacturing facility here several years ago. “If, however, what they do causes them not to be in compliance with our loan, then they will not get the loan.’’

Marlborough-based Evergreen received significant financial support from the state when deciding where to locate the manufacturing facility that is now at the former Fort Devens Army base. The Patrick administration sealed the deal with a $76 million offer that included grants, incentives, land, loans, and other aid. The company ultimately turned down $17.5 million of that aid - including a $5 million MassDevelopment loan - because it thought it could borrow more from outside lenders. When those efforts failed, the company asked MassDevelopment for a new $5 million loan.

The money - approved in September but not yet released - comes out of MassDevelopment’s Emerging Technology Fund, established to help technology companies starting or expanding in Massachusetts to purchase a facility or equipment. Evergreen intends to use the money for wafer, cell, and panel fabrication equipment it already purchased.

Culver said Evergreen’s loan is guaranteed by the company’s equipment. So if Evergreen doesn’t meet its requirements, MassDevelopment could choose to sell that equipment, which Culver said is worth “many times’’ the value of the loan.

“I am not worried in the terms of us getting our money back,’’ he said.

Ian Bowles, secretary of the state’s Executive Office of Energy and Environmental Affairs, defended the support of the state’s emerging solar industry. From 2007 to 2008, the number of jobs in the sector doubled, from 1,000 to 2,000, and were on pace to grow sharply again this year, he said.

“As we move through these challenging economic times, we are confident that the solar industry, including Evergreen, will be an important part of the clean energy future for our state,’’ Bowles said.

JPMorgan Chase & Co. analyst Christopher Blansett questioned how deeply the shift of Evergreen’s panel assembly to China would cut into the company’s Massachusetts workforce. Solar panel assembly, he said, is a very “automated’’ process.

“It’s going to have the least amount of job loss of anything they could outsource,’’ Blansett said, adding that the company is keeping its core operations - the making of silicon wafers - in Massachusetts.

“That’s really the key linchpin that Evergreen is built around,’’ he explained. “They can make wafers cheaper than anybody.’’

Evergreen’s success has been challenged by plunging prices for solar panels, and it disclosed the relocation of some work to China last week in a filing of its earnings for the third quarter of 2009. The company lost $167 million through the first nine months of this year, compared with losses of $33.6 million for the same period last year.

So, it makes sense that Evergreen is moving work to China, according to Blansett.

“Guess what: If they don’t, they won’t exist,’’ he said, adding that he hadn’t seen any commercial lenders in the US “stepping up to the game.’’

And, Blansett said, the United States will continue to see companies move into other countries - unless investors start offering emerging clean technology companies substantial financing, politicians support those firms with policies that insulate them from competition, and consumers buy US-made products even if they cost more.

Greg Torres, president of the research organization MassINC, said deciding when to give companies tax breaks, incentives, and grants is a tough call, especially when forces outside the state’s control could cause the company to expand elsewhere.

“We need to take a tougher look at all of these,’’ he said, asking, “Are they targeted? Are they specific about what we are looking for in return? . . . [and is there a mechanism to] evaluate whether we got what we expected to get?’’

Erin Ailworth can be reached at eailworth@globe.com.