Actionable news
0
All posts from Actionable news
Actionable news in SCTY: SolarCity Corporation,

SolarCity gigafactory brightens New York's manufacturing revival

Buffalo, New York, is on the verge of becoming famous for more than wicked winters, spicy chicken wings and its Rust Belt legacy. The Queen City is the crown jewel in Gov. Andrew Cuomo's multibillion-dollar business-development strategy to revitalize economically depressed Upstate New York by turning it into a 21st-century manufacturing powerhouse.

His Buffalo Billion (as in dollars invested) project — although the subject of federal and state bid-rigging probes — is highlighted by a 1.2-million-square-foot "gigafactory" that will be run by Elon Musk's SolarCity and fabricate up to 10,000 solar panels per day. In late May, New York's Public Authorities Control Board unanimously approved a $485.5 million grant, part of the total $750 million the state will spend to construct and equip the humongous facility.

New York will retain ownership and lease it to SolarCity in a deal negotiated by Albany-based SUNY Polytechnic Institute, the state university known as SUNY Poly.

On June 21, Musk made headlines, and raised investors' eyebrows, by announcing plans for his Tesla electric-car company to acquire SolarCity. The all-stock deal could value debt-ridden SolarCity — whose shares have dropped 63 percent over the last 12 months, partly due to changes in regulations on the solar-energy industry — at as much as $2.8 billion. Tesla is valued at nearly $33 billion.

"We would be the world's only vertically integrated energy company offering end-to-end clean energy products to our customers," Tesla said of the deal on its company blog. "This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered." Coincidentally, Tesla is constructing a battery-production gigafactory in Reno, Nevada.

While the acquisition awaits approval from the companies' respective boards and shareholders, SolarCity co-founder and CEO Lyndon Rive — who will recuse himself from the decision-making process — told CNBC.com, "We don't expect the offer to impact our plans in Buffalo." The company has said it will spend $5 billion on capital, operations and supply-chain support over the next decade at the facility.

SolarCity officials recently reported that the gigafactory is nearly 90 percent complete and that it hopes to start installing equipment this summer. "Manufacturing is scheduled to begin in 2017," Rive said. "SolarCity has committed to employ at least 1,460 people in the city of Buffalo, with 500 jobs at the manufacturing facility. We will employ a total of 5,000 people in New York state by the 10th anniversary of the completion of the facility."

New York state boasts a long and illustrious history as a manufacturing empire. As did other Rust Belt states, however, it suffered a devastating decline beginning in the 1970s, when manufacturers moved to the U.S. South, Mexico and other foreign countries to take advantage of cheaper labor, lower taxes and fewer regulations. Globalization and the Great Recession forced further factory closings. Manufacturing jobs statewide, numbering more than 2 million in the mid-1940s, plummeted to less than 500,000 in 2009, according to the state's...


More