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Last engineer let go at eastern Idaho Hoku plant

By Associated Press

LAST UPDATED: 11:58 a.m. HST, Jun 10, 2013

POCATELLO, Idaho » An estimated $400 million polysilicon plant in eastern Idaho now has only eight workers, all security guards, after its last engineer exited last month amid dwindling hopes the facility will ever produce materials for solar panels.

Hoku Scientific Inc., based in Hawaii, started building the plant in Pocatello about five years ago, as interest in solar energy grew and polysilicon prices rose. The company predicted it would provide hundreds of higher-paying jobs in the region. But polysilicon prices began to plummet, and Hoku laid off 100 employees in May 2012, just before production was to begin.

The Idaho State Journal reports the company's last engineer, Ken Gibbs, stopped working at the plant last month.

Gibbs says he and other employees had spent the last several months trying to figure out a joint consolidation plan to save the plant from financial ruin and get it online, but they were unsuccessful. He said prospective partners for the facility all balked, as Hoku may eventually be forced to relinquish it for pennies on the dollar.

"Why should a big company go into a joint venture when they can wait and buy it in bankruptcy," Gibbs said.

In 2012, Honolulu-based Hoku announced it was delisting its stock from Nasdaq, saying it had been unable to maintain a minimum $1 bid price for its stock, a violation of the exchange's listing requirements.

That's after Chinese investors in 2011 had propped the company up, a move that lent hope the Pocatello facility would be completed.

That was short-lived, however, as tumbling polysilicon prices meant the new facility was incapable of producing material for solar panels without losing money in the process. The problem: Solar manufacturers worldwide are saddled with production glut, rock-bottom prices and U.S. allegations of predatory Chinese pricing, just as Italy and Germany slashed incentives that propped up their solar industries.

In Pocatello, Gibbs said the problems with contractors and others escalated during his tenure.

"It was always, 'When are we going to get paid?'" he said.

If the idle Pocatello plant is sold in a federal bankruptcy proceeding, Gibbs sees some hope it will eventually operate, though he now concedes that it may have to be retrofitted to produce something else. Another possibility: Its gleaming new equipment could eventually be dismantled and sold in pieces, to help satisfy liens against the company filed by contractors that helped build it.

If that happens, Gibbs predicts they'll get little of what they were originally promised.

"Hoku never made money," Gibbs said. "And you can't borrow money forever."

Company officials didn't respond to emails or phone calls from The Associated Press seeking comment.

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Maneki_Neko wrote:
Not surprisingly, most of the really fat tax credits had a five year time frame. The time is up. Another triumphant chapter in the ongoing tale of Act 221 throwing a billion dollars of potential tax revenue out the window with overly generous tax credit policy.
on June 10,2013 | 02:41PM
lee1957 wrote:
Er, what does Act 221 have to do with a plant in Idaho?
on June 10,2013 | 02:49PM
inverse wrote:
The overly generous Act 221, which has become a tax shelter for wealthy individuals to allowed Shindo to think really BIG and expand his company beyond Oahu and think he can make it big as a polysilicon manufacturer on the mainland. Nothing wrong with thinking big and taking chances HOWEVER his ability to expand was NOT because of solid business model rather because all of the tax loophole Act 221 monies offered to him. He then got into trouble and basically it was the beginning of the end when he sold the controlling interest of Hoku to a Chinese national company. Last I read Hoku has a PV installation business in Hawaii however the market is crowded and not that Inouye passed away, Hoku might have lost the 'connection' that allowed him to expand so quickly in the first place. The same story could be said of Clayton Hee brothers' company in which Inouye gave him an incredibly lucrative federal contract money for installing Internet on Hawaiian Home lands. Think the name was Sandwich Isle...They thought they were so powerful with Inouye backing them with federal monies they thought they could take over Hawaiian Tel. Again, now that Inouye passed away, the natural Darwinian business order has relegated Sandwich Isle and Hoku into oblivion. This was a subtle, but very important point to understand Hoku as kind of Hawaii's version of Solyndra and Maneki Neko was spot on.
on June 10,2013 | 03:29PM
Mythman wrote:
Wow, invese described this beautifully, which shows how objective his description is as based on factual analysis: it was a govt insiders boondoggle from Day One - and became a biz school case book study for how such a scheme is so risky. well, not risky when the taxpayer is the "investor". Now, wrt, Inouye, the hidden hand "CEO' of all these localized insider outfits, a long list, a certain cong woman is trying to pick up the ball. The SBA 8a, ANC and NHO ball is in the same court as Hoku et al. This goes all the way back to Hydrogen. Remember Hydrogen fuel cells?
on June 10,2013 | 03:50PM
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