SOlyndra-Scandulous
Last summer in August 2011, the California-based solar panel company Solyndra claimed bankruptcy, and **** really hit the fan. How does a $535 million granted loan from the government hit rock bottom like that and who’s to blame? Some critics have noted that this loan guarantee process was a multi-year processthat originated during the Bush administration, but when Obama took office he sealed the deal. Out of 143 companies expressing interest in receiving a loan guarantee, Solyndra was the first to get approved.
Originally, this loan was to guarantee Solyndra to create 4,000 new jobs for Americans; referred to as the “green jobs”, which was supposed to be the key to future economic growth. Whelp…that went over well huh? Instead 1,100 employees lost their jobs and an estimated 90% remain unemployed.
The company’s innovative solar panels are high priced to begin with so they quickly became uncompetitive in the marketplace. They didn’t have enough customers to keep up with the supply and demand scale. Even if Harrison and Stover (the two executive owners) remained optimistic that everything was going to be okay 6 weeks before bankruptcy, it’s their own stupidity. Even with the additional $75 million coming from one of the billionaire investors to keep them in business they STILL failed. How could no one see what was going on during this time and do something about it?
“It is here that companies like Solyndra are leading the way toward a brighter, more prosperous future. We can see the positive impacts right here at Solyndra”, President Obama cluelessly preaching about his visit to the company in May 2010. What we didn’t see was that the company had accumulated losses of $558 million in its five years of existence, which was discovered by an audit perform by Price Waterhouse Coopers two months before the visit. “Solyndra has suffered recurring losses from operations, negative cash flows since inception and has a not stockholder’s deficit that, among other factors, raises substantial doubt about its ability to continue as a going concern” (Michael Barone, AEI Washington Examiner). The two executives pleaded the fifth amendment at court and chose to speak nothing about it, no one can prove whether they had good intentions or not.
The fact that the government is handing out hundreds of millions of dollars to unproven and tentative business for the so-called “green jobs” loan guarantee program is unacceptable and has no excuse. If the company’s business plan worked out smoothly, the loan costs the government basically nothing because it doesn’t require federal government to give out money unless scenarios like this happen. Unfortunately, American taxpayers have the deal with the consequence, as well as the job loss of Solyndra employees.
So what does this all mean in the sense of Solar panel manufacturing in the U.S.? If we look back in the past China was making 6% of the worlds solar panels, and now makes 54%, taking the world lead in solar panel manufacturing. America now needs to think of a new way to create innovative technologies that China won’t be able to reproduce to get us back up on the market. By thinking of some new technology it’ll help us get away from our main use of coal, which won’t be an easy task because the cost advantages have built up tremendously over time.
Sources:
http://www.nytimes.com/2011/09/24/opinion/the-phony-solyndra-scandal.html
http://en.wikipedia.org/wiki/Solyndra_loan_controversy