Solyndra, Inc. announces plans to file for bankruptcy

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Putting aside the fact that we the people have long debated the extent of government intervention in our free enterprise system, let’s begin with this, via wikipedia:

Free market capitalism consists of a free-price system where supply and demand are allowed to reach their point of equilibrium without intervention by the government.

Businesses succeed only when they can supply viable products to meet a demand, and demand simply cannot be fabricated or forced. So why am I talking about this here? First, this is personal. We recently borrowed great sums of money from our grandchildren to help jump start the economy and put people back to work. Secondly, the government has demonstrated a complete lack of competence in distributing these large sums of money. In doing so, in this instance, it makes our jobs as sustainable professionals much more difficult by casting a shadow on responsible environmental stewardship. And, unfortunately, this one does reek of politics and the corruption associated with politics.

via The Washington Examiner, David Freddoso: Obama’s big green gamble: Solyndra

In late May, when President Obama was in California for his fourth fundraiser for Sen. Barbara Boxer, D-Calif., he also made a point of dropping by Silicon Valley to praise his own stimulus package.

“It is here that companies like Solyndra are leading the way toward a brighter, more prosperous future,” Obama said of a solar energy company that had recently received taxpayer backing. Obama spoke of the company in glowing terms and used it as an example of how the stimulus package is creating jobs all over America.

“We can see the positive impacts right here at Solyndra,” he said. “[T]hrough the Recovery Act, this company received a loan to expand its operations. This new factory is the result of those loans. Since the project broke ground last fall, more than 3,000 construction workers have been employed building this plant. Across the country, workers in 22 states are manufacturing the supplies. … Solyndra expects to hire 1,000 workers to manufacture solar panels. …”

Solyndra was the very first company to receive a Department of Energy loan guarantee under the stimulus bill. When it was awarded, Vice President Biden said the project was “exactly what the Recovery Act is all about.” Energy Secretary Steven Chu said it would help “spark a new industrial revolution that will put Americans to work.”

But even if Solyndra is a good example of what the stimulus package can do, it might not be the kind of example Obama wants to publicize. Jim McTague of Barron’s noted over the weekend that, two months before Obama’s glowing speech, PricewaterhouseCoopers released a fear-filled note in its audit of the company, which has accumulated losses of $558 million in its five-year lifetime. The firm noted that Solyndra “has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern.”   

via BIGGOVERNMENT, Obama Bundler George Kaiser Made Multiple Visits to White House in Months Prior to $535 Million Loan Guarantee to Solyndra

Solyndra, Inc., a solar panel manufacturing facility, in Fremont, Calif. that received a $535 million loan from the U.S. government has announced layoffs of 1,100 workers and plans to file for bankruptcy.

The iWatch News investigation confirmed that at least 18 other bundlers have ties to businesses poised to profit from the president’s political agenda, through stimulus money, government contracts, or other spending to promote clean energy technology or green development.

Oklahoma billionaire investor George Kaiser is one. A longtime Democratic donor, he is a big financial backer of a company that in March of 2009 won a $535 million loan guarantee [19] from DOE for a solar plant in Silicon Valley. He had multiple visits to the White House in the months before he was awarded the contract. Kaiser has not responded to interview requests from iWatch News.

This doesn’t look very good considering it was widely known that Solyndra was in deep economic trouble in 2010 and had negative cash flows since its inception.

Kaiser says he did not use political influence or talk to administration officials about a massive government loan to Solyndra.

Lastly, via Ace of Spades (caution: language warning), Humiliating: Time Reporter Who Claimed Solyndra Was In Good Fiscal Health Nine Weeks Ago Is Forced To Report On Its Bankruptcy

Then:

I happened to visit Solyndra’s headquarters today, so maybe I can help the Republicans with their investigation. For starters, the reports of Solyndra’s death have been greatly exaggerated. And while reasonable people can disagree about the loan guarantee program, it’s not the boondoggle its critics suggest… As for Solyndra, I can report to the Republicans who seemed so concerned about the company’s viability that it no longer seems to be on the verge of a humiliating collapse. I’m sure they’ll be relieved.

And now:

Solyndra declared bankruptcy on Wednesday and laid off its 1,100 employees. I’ll have more to say about this after I chat with the smooth-talkers who got me to report in June that Solyndra “no longer seems to be on the verge of a humiliating collapse.”

… more from the Ace article:

“Here’s the bottom line,” Lynch said. “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.”

Sources tell me the Obama administration restructured the loan this winter, so taxpayers probably won’t even be the first creditors to get paid after Solyndra files for bankruptcy next week. The first $75 million will go to two Solyndra investors who poured in extra cash when the company nearly went bust in January. And one of them is a venture associated with the billionaire George Kaiser, an Obama campaign bundler.    

UPDATE #1: From HotAir, How did Solyndra get a sweetheart interest rate? 

UPDATE #2: From abc News, Obama Officials Sat In On Solyndra Meetings. One of the more interesting reader comments:

The government gives them hundreds of millions. The government sits on the board as ‘observers.’ The company goes belly up. The government sues. Anybody see anything wrong with that?

   

“Payola” is a contraction of the words “pay” and “Victrola”, and entered the English language via the record business. However, “The cancer of payola cannot be pinned on rock and roll.” …. Billboard Magazine.

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