On May 17, the US Commerce Department will announce its decision regarding anti-dumping duties on Chinese-produced solar panels entering US markets. This announcement will hopefully conclude a months-long process of posturing and advocacy the results of which, in our view, will underscore a simple axiom about business, competition and today’s global marketplace: Companies win through innovation, not government protection.
Keep in mind that the protest regarding allegations that China is dumping its solar cells at prices below their cost was initiated by a German-owned company with a single facility in Oregon. When the Oregon affiliate failed to keep pace with its industry competition — mostly Chinese manufacturers who have entered the solar panel market — it filed a petition with Uncle Sam looking for help. The effect? To date, the imposition of modest tariffs on certain solar panels imported from China. But come May 17, there’s potential for even more significant duties. This could significantly impact the price of solar energy components in the US and possibly precipitate a broader trade war between the United States and a key strategic trade partner.
GT Advanced Technologies is a New Hampshire-headquartered company employing more than 650 people worldwide, 70 percent in the United States, with annual revenue of nearly $1 billion. We sell more tha 90 percent of our products in Asia. Every day, we see up close how hard it is to succeed in the global marketplace. We’re not under any illusion about how stiff the competition is in the global marketplace, and we have built a winning business model that promotes innovation. What’s more, our business model doesn’t receive any protection from the government.
Other than chafing our Chinese customers, this government investigation has done nothing to improve the US solar industry or change the way the Chinese do business. It merely makes it more difficult for US entrepreneurial companies like GT to export our products abroad. In fact, many Chinese manufacturers are simply redirecting their flow of products through other countries to avoid the US-imposed barriers, or in some cases the location of their production, and in all likelihood they will continue to provide the global market with competitively-priced solar panels. This action by the US government merely forced Chinese companies to find new ways to innovate in order to compete.
In all likelihood the Chinese will be just fine. In fact, we may be transforming domestic Chinese players into more formidable forces by encouraging their global diversification and expansion. But what about the US solar industry?
I look at the time and energy invested in this investigation and wonder: Why, and what for? This is counterproductive to the primary objective of the US solar industry: Getting solar to grid parity. Tariffs, charges of dumping, possible trade tensions — these only enable high-cost manufacturing to continue, resulting in higher solar costs for US consumers. In the end, such moves negatively impact the growth of high-quality solar jobs in the United States.
Instead of carrying water for foreign-owned businesses, we should reward the traits that ensure success in the global marketplace: Business adaptability and commitment to innovation. To win in this race, it’s really about hard work and figuring out how to survive and thrive against highly-motivated competition. We need to be fostering real innovation — not rewarding inefficient businesses that seek government handouts.
GT and many other US-based companies have proven that we can compete against fierce Asian competitors and win. We just have to run better businesses.
Tom Gutierrez is CEO of GT Advanced Technologies, headquartered in Merrimack, N.H.