An American solar panel manufacturing company that received a $535 million loan guarantee from the Department of Energy and nearly $1 billion in venture capital funding has declared bankruptcy, dimming — temporarily at least — President Obama’s hopes of the government spurring employment in the “green jobs” sector, and of reducing American dependence on foreign oil.
Solyndra, a company headquartered in Freemont, Ca. that had been toured by President Obama last year, announced on Wednesday it was laying off all 1,100 workers immediately and filing for Chapter 11, citing strong international competition from more heavily government-subsidized Asian and European manufactures as the prime factors in its downfall.
In a statement, Solyndra said that “despite strong growth in the first half of 2011 and traction in North America with a number of orders for very large commercial rooftops, Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers.”
The release added that the situation was “exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems.”
In fact, the one organization conspicuously absent from the list of those it says are to blame for Solyndra’s failure is the six-year-old company itself.
But the announcement wasn’t exactly surprising, given that just last month, Solyndra’s founder and CEO, Chris Gronet, stepped down.
Well before that, the company was exhibiting signs of serious trouble:
In June, it withdrew plans for an IPO after an audit uncovered serious problems with its debt and positive cash flow (or lack thereof.)
That was after raising securing a $75 million loan in March for the purpose of restructuring.
In November last year, it announced it was shuttering the older of its two manufacturing plants less than a year after building the newer one, which cost $733 million (and was paid for partially with money from the DOE loan guarantee). It also indefinitely postponed plans to expand the second facility and hire 1,000 more workers.
Even President Obama’s visit to the company’s new plant in May 2010 didn’t go off as planned, with workers complaining they were told to stay home without pay.
Republicans have wasted no time in capitalizing on Solyndra’s troubles. The House Energy and Commerce Committee subpoenaed the White House for documents relating to the $535 million loan guarantee granted to Solyndra in 2009, which had been trumpeted as the beginning of a “green robs” revolution by the Obama Administration.
Rep. Cliff Sterns (R-Fl.) who chairs the committee’s subcommittee on oversight and investigations, reacted to the news of the company’s bankruptcy today with disgust:
“Although the Administration has been uncooperative with this investigation, this decision by Solyndra does not end our inquiry and we will continue to look into how this loan guarantee was approved and why the American taxpayers are mostly likely out $535 million,” he said in a statement.
We’ve reached out to Solyndra to discuss where it all went wrong and will update when we receive their response.
