" I was also laid off. For over 20 years, since graduating from college, I've worked in several companies who built product in the US. What I've learned and I think someone mentioned this early in this blog, that there is no such thing as a permanent job. Check out the jobs in Monster or Career-Builder or whatever. Most of the jobs are through employment agencies. I'm just curious to see what happens in the not so far future when people lose their TV's because they can't afford to pay for the electricity, not to mention servicing them. But, being that servicing would be more expensive and not as secure as buying a new one with a warranty. And there is nothing made today that doesn't have some connection with China. A product built here more than likely uses parts from China. Wait until China decides we're not "good customers" anymore and decide to cash in their US currency for the Euro. Oh wait, isn't that already happening? Well, I think this country has 2 ways to go; completely submit to the global economy or isolate and start from scratch. One more thing, none of this will matter when someone drops an EMP over Kansas. "

" I am dissapointed in where the CEO has taken this company. It could have been so successful, it was a company that gave us hope about the future. Instead, he has sunk lower than I ever thought he would. He is full of selfishness, and has left many people full of anger. "

" Well, Louie, Southwest Windpower has no intention of being "green" except in their sales literature. They're taking production to China. I would say they're probably getting ready to do that within the next few months. "

" Why go green? There's so much pretty black coal to burn. I say light 'em up! By the way - "green" energy won't work in this economy. People aren't worried about the environment anymore (well... at least not sane, rational people) - they're worried about real issues like buying groceries and having a place to live. "

" So I guess that means that they won't be responding to the resume I submitted huh? Kind of funny that they are hiring at the same time they are getting rid of people... "

" Didn't SWWP already move their operation once before. Did they not used to be in Williams before moving to Flagstaff, or am I thinking about another windmill maker? "

" By the way, Southwest Windpower developed the Skystream with a cash grant they got from the U.S. Department of Energy. So, now, having developed the Skystream, they want to take production to China? Looks like the American taxpayers got cheated by Southwest Windpower. "

" When are we going to learn America? All this talk about new jobs and "change" is already having it's effect in Flagstaff. "Green Power" jobs will save this country? Yeah, especially when they're shipping those jobs to CHINA! As a matter of fact, I tried to buy an American flag over the weekend for the holiday, I could not find ONE that was actually made in AMERICA! We are doing nothing to stopt the greed and materialism! While our leaders are selling out this country. What was over there is now over here! The USA is on it's way to becoming Mexico in so many ways. Corruption, greed and crime. Welcome to the future. Hope you like rice. "

" When will the Daily sun start doing some investigative reporting instead of just reporting what Frank Greco hand feeds them. Will they move to Phx? Of course the excs all live in the valley. Daily Sun look out your back door and you can see southwest windpower "

" Tater asked:
"Are SWP executives getting millions? "

You'd have to ask them that question, Tater. Bet they don't answer. That's because for a company that has been saying it hasn't made a profit since 1999, what the execs are getting paid would be an outrage. Southwest Windpower just got caught in a major lie regarding moving to Phoenix, which they were trying to keep quiet. And don't forget these execs have mucho stock options which is where the all-out drive to take the company public at all costs is coming from.

The fact is, none of this has anything to do with high taxes, labor costs, or any of the straw men being advanced here. It comes from the goal to take the company public and exercise those options and dump the problems into someone else's lap. Skystream was merely the means to that end. The goal wasn't Skystream, the goal was taking the company public.

CPA, if you are a CPA, I will look forward to the day your job gets outsourced. Experience is a great teacher. "

" Diogenes wrote on Jul 5, 2009 4:20 PM:

" cpa said:
"Good luck with that attitude diogenes, you either get competitive or watch jobs be exported. Companies that can't compete on price aren't in business for long. "

So, you're saying Americans should work for communist wages? But execs should get millions of dollars in yearly salary? "


You're putting words in my mouth, I said absolutely nothing that supports unmerited executive compensation or even mentions communists wages, thats all you. Outsourcing is not restricted to just China or other communist countries, try looking south of the border.

What I am saying is that US wages are not competitive on a global basis, and business gravitates towards the cheapest labor markets. China is a leader in that regard. It does not matter what morality you apply to this notion, the fact is that it does and will continue to happen. Whining about outsourcing will not bring back or save existing US jobs, nor will it do anything to help maintain our current standard of living. If you don't like whats happening I suggest you start thinking about ways to reverse the trend, which means manufacturing costs in the US must go down, including labor which is typically the single largest expense. While I agree that a very good argument can be made for cutting executive pay, that alone will not make US companies competitive on a global scale. I suggest that you look beyond local circumstances for a better understanding of what we face as a country. "

" So, you're saying Americans should work for communist wages? But execs should get millions of dollars in yearly salary? "

Are SWP executives getting millions? "

" I've enjoyed the comments on this article and appreciate the insight to SWWP's situation. I was a huge fan of SWWP and their products but saw the company's mismanagement and hideous spending habits and knew we were in trouble. The fact is, Southwest Windpower is moving all offices to Phoenix and production to their China joint venture manufacturing facility. It's no secret, at least not a good one, just the choices they have made. SWWP's problems stem from overspending on top management's salaries, overspending on travel and promotion of their products, and overspending on design and engineering, which has been poor and unreliable. SWWP had tremendous potential but blew it with incredibly unreliable products, horrible distribution systems, and management that is hell-bent on making the product cheaper--no matter the long-term cost. The renewable energy industry is growing rapidly and most companies are doing very well but SWWP will most likely continue to shrink to a small, relatively unknown company and many more people will be let down in the process. "

" cpa said:
"Good luck with that attitude diogenes, you either get competitive or watch jobs be exported. Companies that can't compete on price aren't in business for long. "

So, you're saying Americans should work for communist wages? But execs should get millions of dollars in yearly salary? "

" Diogenes wrote on Jul 2, 2009 4:06 PM:

" CPA wrote:
"If we want to keep good manufacturing jobs in the US then we have to find ways to significantly lower costs, which I suspect will lead to a lower standard of living in our country. "

So, Americans should have the same living standards as communists, that's what you're saying, right? And all so the execs can live in mansions, right? Tell me more about this "land of opportunity"!

No, keeping manufacturing jobs in America means it should be illegal to export American jobs. Especially to communists. Period. "


Good luck with that attitude diogenes, you either get competitive or watch jobs be exported. Companies that can't compete on price aren't in business for long. "

" Yes, RG, you are correct to an extent. But you didn't state the reason this happened.

American corporations, out of greed, began moving thier manufacturing to China to garner higher profits on the back end by cheap labor. The Right, as per usual, justified this by saying "Get regulation out of business! Hands off business!" Basically, they viewed any restrictions or regulations on business as wrong. Bear in mind this is the same Right that is so virulently anti-communist that we can't buy cigars from Cuba and their standard tactic to win debates is by smearing the opponent as a "communist". However, they support shipping American industry to China, a communist country. This alone will cause us to lose a war with China (or any other still-industrialized nation) no matter how "pro-military" a president is. Once you lose a certain number of aircraft and armor, how do you replace it within a week without enough factories?

To keep Americans from noticing the decline in good jobs and stagnation of wages, the corporations began offering cheap goods from China, cheap food by ignoring food safety (e.coli 0157:H7 is a direct result of factory feedlot raising of beef which made beef cheap), and unlimited credit. To keep enough consumers buying products when the job base really didn't exist to provide such customers, they had to give credit to basically everyone. This is also what created the "mortgage crisis". People could buy houses who really couldn't afford them. But they still sold new 4 bedroom houses to age 20s couples with mediocre income anyway.

And this whole house of cards has finally fallen over and who gets blamed? Oh, it must be the workers for wanting too much money! It's higher taxes! Except none of that was ever trotted out during the heyday of the Cold War when during the 1960s a guy running a drill press at aerospace-defense plant earned enough to buy a house, a car or two, and his wife didn't work. As long as we were building weapons and the government was buying those weapons, no one cared what labor cost because the aircraft plants and munitions factories were making money hand over fist. Oh, but now corporations want to whine about labor costs, despite the fact those high-paid defense jobs are gone and have been for some time (and those defense job wages are gone also) and wages have not kept up with the cost of living. And that's another reason credit got so big. Wages haven't kept up with the cost of living and people lived on credit. That's how people survived the last few years of skyrocketing gasoline prices (and remember U.S. automakers sold everyone gas-guzzling SUVs just a year or two before that began) when the wages did not keep up with the rising cost of living. This is why this crisis hit right after these last few years of jacked-up gas prices. And just because people buy a lot of "stuff" is irrelevant. A lot of that "stuff" is cheap crap from China.

Now we had Obama touting "Green jobs, here in America". Well, he's asleep at the wheel here. The very first thing he needs to do is stop U.S. imports from China of manufactured goods. We can't afford it anymore. We need to roll the clock back and be self-sufficient again or we will not survive. Southwest Windpower is a local example of what happens. The company is run badly by execs without any real leadership skills and who gets blamed? The workers just doing the jobs those execs direct them to do. And so the execs use that as an excuse to use slave labor in China. And the Right laps that up like all the other propaganda they're spoon-fed by the defenders of this practice. The reality is, when it became very apparant that the execs at Southwest Windpower were making poor decisions and the company was failing, they should have been the first ones replaced. Instead, the people just doing their jobs suffered and lost their jobs and poor decisions will still continue because the people making them are still in power there. And so, later, more people will lose their jobs and the same execs will keep their jobs. Until the company finally goes out of business or files for bankruptcy. This is what's happening to American business. It's not the workers, labor costs, regulation, or taxes. It's the fact that execs still get paid millions of dollars even if they fail and Mommy Government comes and saves the company. It's the fact that execs see this pay as an entitlement and not a wage. It's the fact that American execs couldn't lead the way out of a wet paper sack. "

" CPA is correct. And it's going to be happening so soon that it is going to be stunning to so many -- the decline in our standard of living! What most are very unaware of or blind to, is that the damage is done. We are never going back to the boom years of living off of credit -- this unsustainable standard of living we have lived for at least 30 years, if not longer. Be it the government borrowing or everyone borrowing to have a standard of living unlike any in the history of the world. IT IS OVER. This country has already been gutted of enough jobs that there is nothing to recover to. There is this Obama worship notion that the economy is going to "recover" by the end of 2009. It's not Obama's fault, it's not George Bush's fault. It has been going on in corporate board rooms for decades. You have likely lived the best years of your life if your life is about buying STUFF and having THINGS and you have few other core values. Housing is not going to rebound. Gas is never again going down. GM will never return to prominence. We are a debtor nation unlike anything since the beginning of time and nothing is on the horizon to fix it.

This is brutal and sad, but true. What do you expect to replace our once powerful industrial base which shifted to "financial services" which then burst wide open like a hot air balloon that someone cut a gaping hole in? We're never again going to invent value-less investments to keep the whole thing going. The emperor no longer has any clothes. "

" Listen up people....
Don't mean to be the bearer of bad news.
No job is safe and don't be relaxed at your job.
It doesn't matter anymore if you show up for work everyday, do your
very best and be a hard worker.....it just doesn't matter anymore.
I have known people that worked a job in this town for 10 years and got
fired for the least little thing. You have to have personality and if they don't
like you....you are gone just like that.
So anyway...... I think I will go back to school so i can have job security. "

" Me -- My personal experience with tax law is limited to turbotax, so I will stipulate your explanation on which taxes the company successfully avoids. But how can they avoid paying their annual property tax, or fee's and licensing priveleges ? Or even state and city sales tax on goods and services they purchase? The company may not be making money, but it still has value. Even if the business is self destructing, they are making and selling things, which brings in another bite of revenue as they collect sales tax for the state. Does it matter which state will benefit from all of that tax activity?

In this economy, business is tough for nearly everybody, but to be a player in an industry with the backing of a worldwide campaign shilling for them, politicians in their pockets, and enormous sums of public and private money to help develop and move their product, well. . . . . . .why isn't this company booming? "

" CPA wrote:
"If we want to keep good manufacturing jobs in the US then we have to find ways to significantly lower costs, which I suspect will lead to a lower standard of living in our country. "

So, Americans should have the same living standards as communists, that's what you're saying, right? And all so the execs can live in mansions, right? Tell me more about this "land of opportunity"!

No, keeping manufacturing jobs in America means it should be illegal to export American jobs. Especially to communists. Period. "

" Well, the fact is, Southwest Windpower made poor decision after poor decision. Nearly everyone who has worked there or works there now knows this. From the outrageous spending (seriously, you should have seen some of the personal expenses, travel, and off-site meeting "costs") to the wildly unrealistic sales forecasts that resulted in skyrocketing overhead, to consistantly poor decisions by upper management. Many people saw this coming. Many people warned upper management that the company couldn't continue running like this. But upper management refused to hear or heed these warnings. They'd just keep going back to the investors for more money instead of living within their means. The cycle would go like this: Get investment money---spend, spend, spend---uh oh, we need to tighten our belts---get more investment money---spend, spend, spend---uh oh... And on and on.

This is why now 29 people have lost their jobs. Those 29 people paid the price. But I suspect that even if SWWP made the $3 million a month benchmark set by Frank, then Frank would have called for $4 million and used that to justify moving the offices to Phoenix and production to China. After all, why else are they laying off production people? "

" To Tater -

No, taxes do not affect SWWP's bottom line because they do not pay any.

Allow me to explain. Businesses are able to deduct expenses on their tax return. I am a CPA, so I know how corporate tax returns are prepared. I am also a former employee, and friends/family with current ones, so I know their expenses exceed their revenues.

When a corporations' deductible expenses exceed their revenues, they have a net loss. Corporate taxes are levied on the net income of the business. If the corporation is not profitable, it does not pay taxes.

Check out www.irs.gov and Form 1120 if you would like to see for yourself how corporate taxes are calculated. "

" There has never and will never be a plan to bring "all" of the laid off employees back. Some of those workers were laid off simply because SWWP no longer wanted them any longer. In some cases, the layoff was the reason to terminate some of these. Before, when SWWP did not want an employee, they made being there unbearable so the employee would seek employment elsewhere, quit, and if they did not quit, then were fired.
I've read about the move to Phoenix, but has anyone even thought about, say, St. Louis, Denver or even California. "

" It is no surprise. I wanted to put a wind generator in my yard however the prohibitive cost of over ten grand is not feasible when electricity is cheep in this state. If China can produce the same produce at half the cost, then so be it. Good for them. This is what over taxation does to our economy folks and it will only get worse with the current administration at the White House. "

" I am sure the shareholders want some profit from the company before they sell the company at a pretty penny. The cost of labor in China is cheap, but the company might get there too late. The price of labor is rising in China during the last boom. When the price of labor is the same as the US things will change. Product quality is a big problem with chinese goods aka chinese drywall. On the other hand there maybe there is not enough quality labor for back breaking work. Sometimes it is even hard to find somebody that knows how to wash dishes. "

" Very disturbing indeed. What about the "Business Retention & Expansion" program the city took over 2 years ago? They should have seen this coming, and provided assistance/solutions. Even though I don't work there, I would hate to see another company pull out of Flag. Good thing we have alot of retail to balance things> "

" Me wrote on Jul 1, 2009 7:41 PM:

" To Anne - this company is not profitable, thus it does not pay taxes. This has nothing to do with our tax structure, nor the economy. This is a cover up for a strategic exit from Flagstaff. "

Does not pay taxes? Whats up with that? You think they just tell the tax man 'we had a bad year, go away'? You may be correct about the exit strategy, but you should at least acknowledge that taxes affect the bottom line and most certainly contribute to whether a company is profitable or not. "

" We all know that moving production to China is not unique to SWWP or the wind energy industry, but it is indicative of a larger problem we face as a nation. US production is expensive because we are not price competitive and profit is what drives business, irregardless of how one feels about that. All other aspects of business are secondary to profit. Despite executive compensation, blaming corporate greed is too simplistic to explain outsourcing and doesn't begin to tackle the larger problem of a declining US manufacturing base. The current US standard of living is unsustainable, yet it continues to rise in China which has every intention of becoming a new superpower. We are facing a significant global shift of power that is being played out on an economic front and SWWP is just one of many examples of how this is occuring. If we want to keep good manufacturing jobs in the US then we have to find ways to significantly lower costs, which I suspect will lead to a lower standard of living in our country. "

" "Phil McCracken wrote on Jul 1, 2009 8:53 AM:
'Readers, please ignore Diogenes diatribe. He is a disgruntled ex-employee.'

That is NOT a reasonable statement. It sounds reasonable, but it isn't. What that is, is spin.

The fact is that if he IS a disgruntled ex-employee, then he probably HAS a legitimate reason for being disgruntled.

Far from making his statements less valid, the fact that he is a disgruntled ex-employee lends MORE weight and validity to his statements. "

" With regard to cheap production in China versus U.S...I was over there and saw the sweatshops in action. It is not a joke and here in America we provide fair wages (some higher and some lower depending on unions). The government has their hand in everything and every company over there as well. If they get their cut, then the workers will show up for duty at 20 cents per hour. We do not want to be like them. Gov't still gets their cut like ours get taxes here. It is just called something different. Be careful what you wish for... "

" To Anne - this company is not profitable, thus it does not pay taxes. This has nothing to do with our tax structure, nor the economy. This is a cover up for a strategic exit from Flagstaff. "

" Wow, Phil, you really believe that? Funny, because in the update article last night, here's what you said---

Phil McCracken wrote on Jun 30, 2009 6:10 PM:

" ...don't let them fool you. Southwest is going to move it's entire production to China and it's offices and warehouse to Phoenix. Sad..... "


Who is "them", Phil? What, Southwest Windpower is just going to do this without Frank's knowledge? We should "wish him the best"?! This is exactly why Americans continue to lose jobs. They just suck it up and take it without a peep. And even defend the execs doing it, as you are doing Phil. I am guessing you can't make up your mind which side you're on, Phil. You criticized Southwest earlier and even said they were trying to "fool" the people. Then you criticized them again here. And now you defend the exec making the decision you so obviously disliked. Pick a side, Phil. You either support the workers losing their jobs or you don't.

Anne, nice try, but you're wrong. Taxes are not why Southwest is having these problems. Very poor decisions made by upper management are why they're having these problems. They think Chinese production will bail them out. Sorry, Anne, but supporting taking American jobs to a communist country means you support communists in my book. "

" Greed? How about restrictive and burdensome taxes placed on small business by our Govt. Face it with our tax structure, products made here are already at a disadvantage and must have a higher price tag to start with.

Why is everything made in China cheaper????? US Taxes on businesses small and large are passed on to the consumer. Until the U.S. Govt limits burdensome taxes on the small businessman and corporations, production will continue to go overseas. "

" Where's Waldo? Where's the stimulus money that was to support these failing industries? Where are the T Bone Pickens commercials? Gas goes up people panic and change their ways. Gas goes down, business as usual. Fact is you need a really windy location to make these things pay for themselves. Very few places in Az or in the SW for that matter cut the mustard according to the government website that shows the average windspeed around the country. Google it as I do not have the link handy. "

" You shouldn't blame a political party for a lack of intervention. GREED is the motive for relocating and setting up production in China. Greed and greed alone. What good can come from such a decision?
I looked at the website http://www.windenergytruth.com and saw a windmill laying on the ground after it fell off the pole. Build a better product and build it HERE in Flagstaff! "

" Mr. Greco is doing his (very difficult) job the best way he knows how. He has to make the very difficult choices. He is doing so for the best of the company. We may not agree with it, but we should wish him the best in his efforts to keep the company alive. "

" Phil, it appears to me we are saying the exact same things here. It also sounds like ex-employees of Southwest Windpower have plenty to be disgruntled about. Especially to lose your job to a cheaper overseas factory, if what you're saying is correct. I'm guessing that overseas factory would be China, since Southwest already has a production line there. So, admin goes to Phoenix, production in China. Used to be Southwest prided itself on being made in America.

I'm sorry, but Americans have gotten too used to losing their jobs to overseas and just walking away. People need to speak up and speak out. "

" Comments that are libelous in nature will not be approved. You can always contact the business directly with your concerns. "

" Readers, please ignore Diogenes diatribe. He is a disgruntled ex-employee.

This has been a long time coming for Southwest Windpower. Starting early last year the over ambitious sales projections led everyone to believe that it would never end. They had a record year last year, but it was too ambitious to maintain especially the way Southwest spent money. Unfortunately the employees paid the dearest price. They lost their jobs, their families suffer and worst of all they lost the heart and emotion and sweat and love they put into their jobs there.

For many months now it has been obvious from the inside that Southwest would move out of Flag. Production will move overseas, the administration will move to Phoenix.

Sad, sad, sad..... "

" Can Flagstaff now finally see the truth about Southwest Windpower? How many more people will lose their jobs just so Frank Greco can keep his? People, educate yourselves at www.windenergytruth.com and learn what the real problem is here. The sales didn't just dry up overnight. There are many more problems here Frank will never tell you. Former employees, please visit the website and share your experiences. "

" I suggest that President Obama pick up a copy of the Daily Sun in order for him to understand what the free market is doing. Obviously we're not headed in the direction of wind power to satisfy our energy needs. I'm wondering how long it will take for the Democratic party to understand that America needs to tap into our own domestic oil resources. Let the price go to 4 or 5 dollars a barrel. Americans will demand that this administration do the right thing. Democrats - always the last to know, the last to understand. Pathetic. "