In September, the Germany-based manufacturer announced restructuring measures and lowered 2018 forecasts. At the time, it did not divulge any specific details. Then on December 3, it again revised its FY guidance down.
Now today, echoing similar moves made in 2014, when it reduced guidance twice and shed over 600 jobs, SMA has said that around 425 full time job losses will be made, out of a total of 3,307. Over a 100 of these relate to positions in Germany, and more than 300 in foreign locations.
The redundancies will be made from January 2019, pending approval from the works council.
The company will also leave China and sell its companies to the management there. In December 2012, SMA announced it had acquired a majority stake – 72.5% – of China-based inverter company, Jiangsu Zeversolar New Energy Co., Ltd for around €40 million in cash.
Responding to requests for more information on exactly what SMA will sell, a spokesperson tells pv magazine that it will “shortly” sell its three production, development and procurement sites to the local management. It declined to disclose the sale price.
SMA did say, however, that it will still have the opportunity to use the development and production capacities there for the next two to three years. “The production capacity in China is approx. 6 GW. So after the sale, we still have around 14 GW of production capacity in Germany that we will now better utilize,” the SMA spokesperson added.
CEO of Smart Solar Consulting Goetz Fischbeck says that the move to wind up its activities in China is likely behind the departure of former CEO Pierre-Pascal Urbon – who was behind the “Chinese adventure”, as characterized by Fischbeck.
“After spending in excess of one hundred million euros over the past six years to gain access to the Chinese inverter market or at least to benefit from its operations in China to establish a low-cost brand for the emerging markets, SMA had to concede that this concept had completely failed,” he tells pv magazine.
“SMA finally had to accept that it would never be able to generate any profits with its subsidiary Zeversolar in China. I wouldn’t be surprised if the timing of Urbon’s resignation as CEO in October had to do with the fact that it became all too obvious that holding on to the ‘Chinese adventure’ could no longer be justified,” he adds.
As the company said in September, the changes are being made in order to “return SMA to profitability quickly in an environment characterized by a sharp decline in prices.” It cites the the market downturn in China, which resulted in “enormous excess capacity”, rapidly declining prices and postponed projects on the back of the country’s 31/5 PV policy change for its current situation.
“Our deliberations with regard to restructuring centered on the issue of location. With the measures that have now been resolved, the SMA Managing Board is demonstrating its commitment to Germany as a business location,” said CEO Jürgen Reinert in today’s statement.
He continued,“The measures are aimed at reducing SMA’s fixed costs and making optimal use of our capacity at the headquarters by focusing on our core competencies, outsourcing and automating activities, and reorganizing structures. Unfortunately, the reduction of the global workforce by around 425 full-time positions is unavoidable in this context.
“The sale of the business units in China to the management there will create good conditions for the positive further development of business on both sides. In order to secure SMA’s success in the long term, we will increasingly press ahead with the process begun to develop the company into a systems and solutions provider and will continue to invest in the future-oriented areas of energy management, storage integration, repowering, and digital business models.”
The article was updated on 12.12.2018 at 13.45 (CET) to include comment from SMA and again at 15:17 (CET) to add analysis from Fischbeck.