Chinese solar company, Suntech Power (STP) is in damage control mode after statements it made to the New York Times blew up in it face.
On Tuesday, Suntech (STP) told Keith Bradsher of the New York Times that it was selling solar panels below marginal cost to gain market share, which could be a violation of trade laws, as it fits the description of “dumping.”
After the story was published, European solar manufacturers were in an uproar, with the CEO of SolarWorld in Germany calling for a “Buy European” provision that would limit the sale of Chinese panels in the Europe.
Suntech’s CEO and founder Shi Zhengrong called Bradsher back to say he is not illegally dumping products to gain market share. He says he misunderstood the question. Bradsher reports that he asked it twice, and Zhengrong understood it then. Well, Zhengrong is changing his story:
Dr. Shi, who speaks fluent English and conducts interviews in that language, said on Wednesday that Suntech’s operations in the United States had been losing money since they started in 2005, but he attributed losses to operating expenses at the 54-employee American subsidiary.
He said the price that Suntech charged for each solar panel more than covered the production costs and therefore was above the marginal cost. But the administrative costs of running the subsidiary are fairly high on a per-module basis because the company is still building sales. The marginal cost of selling manufactured goods is the cost of producing one additional unit — typically the incremental cost of materials, assembly and shipping — excluding virtually all administrative costs.
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