Expensive adventure:bosch announces end of its solar division

"Due to the changed market conditions, we saw no chance of a lasting improvement," said group CEO volkmar denner in stuttgart on friday. "We were unable to absorb the massive price pressure in a market that is becoming increasingly difficult."The decision will affect a total of around 3,000 employees, according to the information provided.

Production of crystalline solar cells at the company's headquarters in arnstadt, thuringia, is to be discontinued at the beginning of 2014 and all development and sales activities terminated. Bosch wants to sell the plant in france, as well as the shares in its subsidiary aleo solar. Bosch had already closed the solar site in erfurt at the end of 2012. Only the plant in brandenburg an der havel is to be continued for the time being. Its future will be decided later, he added.

"We are aware that the employees are now facing a difficult time," said denner. It is not yet clear what will happen to the employees. If possible, however, bosch wanted to find them jobs at other locations.

According to preliminary figures, the division had printed a good one billion euros off the group's balance sheet in 2012 alone. In addition to an operating loss of around 450 million euros, the solar subsidiary once again posted unplanned impairment losses of around 600 million euros.

"Such losses are not sustainable for bosch in the long term," said denner. Over the years, losses totaling almost two and a half billion euros had been accumulated. Not counting the costs of the phase-out.

Employee representatives criticized the decision. Although the solar business is not generating profits at the moment, innovations require more time, explained berthold huber, head of the union for metal, engineering and electronics. "Anyone who gives up now will be saying goodbye to a technology of the future in the long term, and will damage germany as an industrial and high-tech location."

The chairman of the bosch works council, alfred lockle, demanded a perspective for the employees: "from the point of view of the employees, the activities must be continued at least until a successful search for an investor for this business area," he explained. "In addition, we need long-term security of employment and collective bargaining agreements."

According to experts, bosch, the world's largest automotive supplier, simply backed the wrong horse with solar energy. "Cars are highly complex engineering products whose construction requires highly specialized knowledge of materials, mechanical engineering and electronics," said solar expert wolfgang hummel of the center for solar market research in berlin. Solar cells, on the other hand, are now mass-produced. With the photovoltaics sector, bosch had entered a field of business in which the company had not been able to exploit its strengths.

After ruinous price competition due to cheap competition from china, the entire solar industry is currently under enormous pressure – since the end of 2011, bankruptcies have been piling up in germany. In addition to the drop in prices, falling subsidies for the industry are also considered to be the losers.

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