Suntech to shut lone US plant, blaming high costs (2)

"Rationalizing production capacity is necessary to improve our manufacturing utilization and help Suntech return to profitability," said CEO David King.

"We're hopeful that these tough decisions will help put Suntech back on track for growth."

The US plant, in the town of Goodyear near the city of Phoenix, opened in October 2010 and was once expected by company executives to be capable of producing enough panels each year to generate 120 megawatts of energy.

However, the facility reached its peak annual production of 50 mW in 2011, and in November last year it scaled back production to 15 mW, citing oversupply problems, and cut staff from the 100-strong workforce.

At the same time, Suntech also reduced capacity at its base in Wuxi.

Suntech has been hit hard by shrinking demand for its products since the European Union and the US imposed anti-dumping and anti-subsidy tariffs against it and other solar-panel makers last year.

The US International Trade Commission in November voted to slap unilateral tariffs of 36 percent on Suntech solar cells, a panel component, made in China.

Those tariffs, along with US duties from 2011 on aluminum frames used in panel manufacturing, had made it "more challenging" for Suntech to profitably produce panels in the US, according to the company's statement on Wednesday.

The local government in Goodyear, a city of about 65,000 residents, blamed Suntech's decision to close on the US tariffs, according to a statement released to local media in Phoenix.

"It's no coincidence that this decision comes on the heels of the International Trade Commission's decision last November to impose heavy tariffs on solar cells and aluminum frames, greatly impacting Suntech's ability to remain competitive," the statement read.

Officials at the Goodyear factory could not be reached for comment.

According to Soft6.com, a Chinese business news website, production capacity at Suntech's Wuxi headquarters has now been trimmed to about 30 percent of the original, to fewer than 5,000 workers.