One of China’s biggest manufacturers of wind turbines is shutting down its subsidiaries in Italy, Canada, the US, and Belgium. Sinovel has gone through two CEOs, layoffs, court battles over alleged theft of a US company’s software, and internal restructuring—all in the past year.Sinovel is hoping to turn its fortunes around by shuttering these four divisions, which, according to company spokeswoman Wang Wen, lack “development potential.” The Wall Street Journal reports:
Sinovel has fared poorly amid the slowing domestic market and overcapacity in the sector. In April, it announced a 58% on-year plunge in revenue last year, swinging to a net loss of 582 million yuan ($92 million) compared with a net profit of 598 million yuan a year earlier.
Even with this retrenchment, the future still looks grim for Sinovel. Just last week the US Department of Justice charged the struggling turbine manufacturer with intellectual property theft, alleging that Sinovel stole source code for software needed to run its turbines from the Massachusetts-based firm AMSC. A former engineer for AMSC pled guilty in an Austrian court to stealing the code on behalf of the Chinese company, and prosecutors are seeking more than $1 billion in restitution.Beijing’s leaders have to be concerned about this news, given the struggles that China’s solar industry has gone through. The country tried to leverage its massive labor pool and willingness to back industry with government money to act as a first mover in renewable energy. That bet isn’t turning out as Beijing had hoped, as solar and wind manufacturers are still struggling to find a way to make products cheap enough to compete with fossil fuels while turning a profit.We’ll be the first to support zero-carbon technologies like wind and solar when they’re capable of competing on their own, without being propped up by government dollars (or in this case, renminbi). Until that happens, the world’s money will be better spent on research and development of this tech rather than on direct subsidies.[Wind turbine image courtesy of Shutterstock]