Suntech Power (NYSE:STP) CEO Shi Zhengrong, who was quoted earlier in the week in the New York Times as saying the company is selling solar panels below cost in the U.S., is now saying he misunderstood the question, and that he is doing no such thing.
In a story this morning, the Times now reports that Suntech’s prices more than cover production costs, but that administrative costs for the company’s U.S. unit are fairly high since it is still building sales here. He confirmed that the company has been losing money in its U.S. operations since they started in 2005, but blamed the high operating expenses. (As opposed to, say, a concerted effort to dump panels below cost to gain market share.) The newspaper notes that the Suntech execs “speaks fluent English and conducts interviews in that language.”
What the Times implies, but doesn’t quite say, is that they don’t really believe his revised view:
Asked twice in a recent interview in Wuxi, China, whether Suntech was selling below “marginal cost” in the United States, Dr. Shi replied that the company was doing so to build market share. Those comments were reported in The New York Times on Tuesday and prompted Dr. Shi’s call, in which he said, “I misunderstood your question.”
According to the Times, “Dr. Shi predicted that Suntech’s American operations might become profitable in 2010 if sales increased fast enough to spread the administrative costs across more modules.”
Meanwhile, the story also notes that Frank Asbeck, CEO of Germany-based SolarWorld, said this week that Europe should adopt a “Buy European” policy for solar panels used in public projects, noting that the U.S. has a Buy American provision for construction projects supported by government stimulus programs.