I once had a neighbor fall for a work-at-home scam where she had to pay for training to get a job assembling small items at home.
If she had the slightest grip on reality she would never have believed she could compete with third-world or even second-world workers making $1/day.
In the same way today some parts of the government are proposing spending lots of money to train U.S. workers to build solar panels and wind turbines.
That reminds me of another neighbor who, 10 years ago at age 55 lost his job and was paid to retrain in computer technology. Some government agency actually thought he could compete with high school graduates who had been working with computers all their lives.
He couldn’t even touch-type. Needless to say he found no employment as a computer technician or network engineer.
Unfortunately, as much as I wish it weren’t true, the same fate awaits most unemployed adults in the U.S. who might be looking to make a new career in green energy and rise much above the recycling or basic assembly level. China is already the dominant producer and probably no one can compete long term.
For example, back in August, 2009, The New York Times reported “Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said in an interview that Suntech, to build market share, is selling solar panels on the American market for less than the cost of the materials, assembly and shipping.”
The Chinese company is reportedly paying $7,000 per year to graduate engineers – difficult to compete with that here in the U.S.
Because of “buy American” provisions and potential backlash, the Chinese are building factories in the U.S. but only to connect the solar cells made in Asia – in other words, only the most basic blue collar assembly jobs – up to 150 workers TOTAL.
(Does all this sound familiar? It is how Japanese car makers virtually destroyed Detroit – with a LOT of help from GM, Ford, and Chrysler of course.)
Germany’s Q-Cells, formerly the second largest solar panel maker was laying off workers last fall.
First Solar, a U.S. company based in Arizona is actually the world’s leading solar cell manufacturer, but just one of the Chinese solar companies is already the worlds second largest manufacturer. Overall China is the world’s leading maker of solar panels according to the NYT report.
Considering that solar cells are made using a lot of potentially polluting chemicals and China has fewer environmental rules, does it look like the U.S. is going to be competitive in a few years?
The same thing is true of wind turbines where the giant blades are made near the wind farm, but the critical turbine/generator combination are made overseas. In other words, more basic blue collar jobs for the U.S.
Again, from The New York Times, January 20, 2010, “TIANJIN, China – China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.”
Vestas, a Dutch company, has the world’s largest wind turbine factory. It is located in Northeast China.
The Spanish Gamesa wind company built a plant in Pennsylvania – they make the blades which are too large to ship from overseas.
Those who think U.S. government incentives to go green will turn this around are kidding themselves that this will bring high-paying green jobs to the U.S. or boost U.S. companies – even most of the blue collar green manufacturing here is owned by foreign companies.
Besides China’s giant lead, that country also controls about 95% of the rare earth metals needed to build giant wind turbines. There is already a shortage of these metals and a single giant wind turbine uses between 500 and 1,000 lbs of neodymium and praseodymium for their permanent magnets.
Unlike backyard wind generators or ground-based turbines found in coal, gas, or nuclear plants, weight is a critical factor when mounting a turbine hundreds of feet in the air and lightweight permanent magnets are essential.
“The Age” Business Day reported on September 2, 2009, “China accounts for 93 per cent of the production of so-called ”rare earth” elements – and more than 99 per cent of the output for two of them that are vital for a wide range of green energy technologies and military applications like missiles.”
China has been reducing exports of these metals for three years while increasing their domestic use.
“Until spring (2009) it seemed that China’s stranglehold on rare earths might weaken in the next three years – two Australian mines are opening with a combined production equal to a quarter of global output.
But the two companies developing mines – Lynas Corporation (NASDAQ LYSCF) and its smaller rival, Arafura Resources NASDAQ ARAFF) – lost their financing last winter because of the global financial crisis. Buyers deserted Lynas’s planned bond issue and Arafura’s initial public offering.”
China’s government owned mining companies immediately offered to buy 51% of Lynas and 25% of Arafura.
Unfortunately for the dreamers and politicians, China already has a strangle-hold on the world’s supply of the most critical material needed for electric cars, solar panels, guided missiles, wind turbines, cell phones, even the flu drug Tamiflu.
The U.S. may become much greener over the next few decades, but it will have to do so using Chinese resources and technology – does anyone believe China would pass up this opportunity to become the green technology supplier to the world when they can simply stop exporting the most critical material if others begin to surpass them?
China has the money, the political will, the engineers, the cheap labor, the weak environmental protection, virtually ALL the most critical materials, what more do they need?
I’m not criticizing China, they saw an opportunity and took advantage. The U.S. could have done it. Some European countries tried but didn’t have our resources. U.S. companies used to do the same sort of thing when big banks were willing to invest in something other than gambling.
Please let me know if someone sees a way out of this WITHOUT ignoring the basic facts such as:
Where to get the rare metals when China owns all of the production.
How to compete with vastly more engineering graduates.
How to hire engineers for $7,000/year.
How to hire workers for $1/hr.
How to get companies to fund long-term projects.
How to get politicians to focus on the country and not just pork for their district.
AND, because none of the others matter if you can’t get around this one basic fact – once again, how do you get the material needed to become the world’s leader in green technology when those technologies all require rare earth metals and China owns virtually ALL of the rare earth production in the world?
For all of President Obama’s inspirational talk and honest efforts, no one in the administration (or elsewhere) has answered that basic question.
It is like setting out to be the world’s biggest bread maker but not having secured any source of flour.