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Obama-backed energy firm goes bankrupt, even with stimulus
Two GOP senators question loan by U.S.
Question of the Day
When Energy Secretary Stephen Chu announced a half-billion dollars in federal stimulus loans to solar panel maker Solyndra, he called the move part of an aggressive effort to put more Americans to work and end U.S. dependence on foreign oil.
But nearly two years to the day later, the bankrupt Solyndra needs help just to keep it own electricity service from being shut off.
As part of a bankruptcy petition filed Tuesday in Delaware, the Fremont, Calif.-based company sought a court order to bar phone, electricity and water and sewer service providers from “altering, refusing or discontinuing service.”
The request provides another example of just how fast and hard the company has crashed, despite hundreds of millions of dollars in loans and praise from top levels of government, including the White House.
Little more than a year ago, President Obama hailed Solyndra during a tour of the company, saying the company expected to hire 1,000 workers and make enough panels over the lifetime of its planned expanded facility that it would be like replacing eight coal-fired power plants.
“This announcement today is part of the unprecedented investment this administration is making in renewable energy and exactly what the Recovery Act is all about,” Mr. Biden said.
Instead, Solyndra, which was launched in 2005, last week shed more than 900 full-time employees, leaving just a “core group” of 113 employees, according to bankruptcy records filed Tuesday.
W.G. Stover Jr., chief financial officer for Solyndra, said in a court filing that the company was battered by “the combination of general business conditions and an oversupply of solar panels” that reduced prices worldwide.
He blamed the oversupply on expanding capacity by foreign solar panel manufacturers that “utilized low cost capital provided by their governments to expand operations.”
In addition, he said the reduction or elimination of government subsidies and incentives to buy solar energy, particularly in Europe, also hurt demand for the company’s panels.
Finally, Mr. Stover said some customers began refusing to honor their payment terms as foreign competitors offered extended payment terms.
In the wake of Solyndra’s mass layoffs last week, administration officials have defended the move to provide loans to the company.
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About the Author
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