Layoffs due at 2 firms

Frederick, Columbia sites to cut 220 jobs

April 01, 2009|By Hanah Cho | Hanah Cho,hanah.cho@baltsun.com

BP Solar will lay off 140 employees at its Frederick manufacturing plant in November, while Columbia biotech firm Osiris Therapeutics Inc. is cutting more than half of its 157-person work force.

BP Solar said Tuesday that it is eliminating solar module assembly at its Frederick plant as part of broader efforts to lower costs by 25 percent by using outside suppliers for more efficient and higher-volume production work.

The company attributed its cost-cutting move to staying competitive in an industry dealing with soft demand, a weak credit market and an oversupply of inventory.

About 23 percent of the 600-member Frederick work force will be affected by the move, the company said.

"We're not closing the plant here," said BP Solar spokesman Tom Mueller of the Frederick plant. "We're simply taking one part of the manufacturing process, and we're going to find some global, high-volume, high-quality firms that can take care of that piece of the process for us."

Silicon casting, wafering, sizing and solar cell production will continue at the Frederick plant. The module assembly involves the final production process of a solar unit, which includes the assembled solar cells.

BP Solar is also closing its cell and module assembly plants in Spain, affecting 480 positions.

Osiris is letting go about 80 employees because it is accelerating the transfer of a bone regeneration treatment to the buyer.

Affected Osiris employees worked at the manufacturing facility for its Osteocel business, which was sold to San Diego-based NuVasive in May in a transaction valued at up to $137 million.

Workers, who have already been notified, will receive severance, Osiris said in a Securities and Exchange Commission filing Monday. About 78 employees will remain in Columbia, the company said.

The company expects to spend $1.2 million to $1.6 million associated with the layoffs, which are expected to occur during the next 30 days, according to the filing.

NuVasive will take over Osteocel processing by April 10, Osiris said. In exchange, Osiris will receive $30 million in cash or NuVasive common stock by Sept. 30.

Osiris has received $40 million in upfront and milestone payments from NuVasive.

Because manufacturing of Osteocel will end, Osiris said it expects to take a $3.2 million impairment charge for the lease on its Columbia plant.

On Friday, Osiris shares fell 21 percent after the company ended enrollment in a trial evaluating its Prochymal treatment for Crohn's disease after discovering a design flaw. Shares fell 78 cents to close Tuesday at $13.80.

JOB LOSSES

BP Solar will phase out solar module assembly at its Frederick plant, resulting in the elimination of 140 positions.

Osiris Therapeutics will end production of bone regeneration treatment Osteocel at its Columbia facility, affecting about 80 employees.

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