Solyndra: The Green Bay Of Pigs?
show comments
  • standfast24

    Solyndra gets worse the more you examine the decision making process and the obvious failings of both the operational business model and the financial leverage.
    You are spot on, this was all about appearances and looking good, as Obama makes his numerous visits to the SF area to shake the money tree of VC’s, tech tycoons,lawyers and trust fund babies. He can point to Solyndra as the example of how forward looking and intelligent his team is.
    Solyndra technology did not provide a significant enough advantage vs. competitors to justify it’s cost and competition forced them to sell at a loss – so you have a negative gross margin to start.
    Building a new facility to increase capacity would only make sense if you could drastically lower your cost to manufacture, scale massively to meet demand and use a very high degree of automation.
    Now you could show a path to a positive gross margin and ultimately profitability by a a combination of increased market share and manufacturing yield – but it would have to seem reasonable and fit market conditions.
    Finally you would need adequate working capital and reserves to cover the losses until cash flow was self sustaining to the firm.
    This is all basic business 101 and mostly common sense.
    Yet, review of the Solyndra transaction indicates that all these basic requirements were either ignored to explained away.
    This was a “hope and change” deal, hope the planned IPO would provide the working capital needed and change- that the Chinese would cease to be the ruthless competitors they are.
    The planned IPO quickly died (not a good sign), the large new factory-in high cost Silicon Valley proved to be far too expensive
    to operate. Bankruptcy, layoffs and a sizable loss to the tax payers was the end result.

  • Kenny

    Is this mere crony capitalism or is it fascism?

  • Corlyss

    The helpful media will ignore this story to death. The only people flogging it are the mean, hateful Republicans who want to see Obama fail.

  • Corlyss

    And while we’re on the subject of Solyndra, what’s all this talk about a clause, in the grant or contract or loan guarantee or whatever the vehicle for this corrupt bargain was, that moves private investors to the front of the line vice the government. If there is a law which both predates the renegotiated loan guarantees and which prohibits such an arrangement, the clause is ultra vires, and therefore null and void ab initio.

  • Steve goodman

    Building a new facility to increase production at higher cost would make sense if those costs were low relative to the costs of fossil fuels, and wasn’t the plan all along to increase the costs of coal and oil fired electric generating plants. It’s nothing more than capitalism in reverse. Magical thinking. If you build it they will buy.

  • teapartydoc

    Hey, Kenny. I don’t think you can really have one without the other.

  • Matt

    In contrast to the private sector’s clear-cut search for profits, RAND’s Charles Wolf, Jr. says that the government’s internal processes (“internalities”) are often poorly connected or disconnected from outcomes. Government frequently cares more about how something looks (to key groups of supporters, to the press) than about what it does.
    Replace government with either Liberal or Progressive or Democrat and you have a major explanation of the failings of the “Blue” model.

  • John

    I have no sympathy for investors trying to cash in on thje Great Global Warming Hoax.

    The thinking was that Obama would destroy the coal and petroleum industries to some degree, then mandate alternative energy, much as the government had mandated CFL light bulbs.

    It is suddenly dawning on them that a scheme of this size would take decades to unfold, not three years. And that it would utterly wreck the economy in the meantime, meaning that the perpetrators could be voted out of office before its completion.

  • Koblog

    “But in government, where profit… plays second fiddle to … political objectives, it’s much easier to make bad investment decisions.”

    It’s much easier for government to make bad investment decisions because nobody in government is using THEIR OWN MONEY!

    Obama is going to walk away a very rich man after squandering literally trillions of public (i.e., not his own) taxpayer dollars on personal trifles rife with kickbacks from contributors, the same as Michelle has squandered millions on personal vacations.

    Yet our glorious “investigative” look the other way.

  • willis

    ” “the worst thing that happened to Solyndra was the loan.”

    The worse thing that happened to Solyndra was taking on a product that management knew up front cost more to make than to sell. My bet is that Obama’s team approaced the wealthy investors and said “I need a real showcase for my Green program.” Put some upfront money into it. I’ll come up with the rest and see to it that you get your’s back if or when it goes south.”

  • Stormin

    No one has published the names and resumes of the people on the Department of Energy Credit Committee that approved the loan. The public has a right to know who these people are so they do not get any more positions of responsibility. After blowing a half billion dollars, they have given up the right to future government employment.

  • Steven Litvintchouk

    Green bureaucrats did not “wreck” Solyndra. Quite the reverse. They propped it up artificially long past its sell-by date.

    Solyndra had bet on a risky new technology of low-silicon solar panels. But finding private venture capitalists willing to invest in that was tough.

    After the Federal Government made its loan guarantee, Solyndra got private venture capital financing only on the condition that if Solyndra went belly up, the private investors would be first in line to get whatever Solyndra had left; the taxpayers would be next in line and might end up with nothing (as seems to have happened).

    If the Federal Government hadn’t backstopped Solyndra, they would never have gotten that private venture capital financing and they would have declared bankruptcy a long time ago.

    Instead, the loan guarantee ended up prolonging the agony; a lot of workers were hired after that and now got laid off without even a severance package.

  • Willis

    “But finding private venture capitalists willing to invest in that was tough.”

    And for good reason. But this administration, that includes no one who has ever run a business, knows that the wisdom of a socialist will trump that of a greedy capitalist any day. And, as always, it falls to us to pay for their stupitity or corruption.

  • sestamibi

    I prefer the Green Bay of Packers myself.

  • This scandal strikes me as pretty benign compared to Gunwalker. Solyandra is what happens when naive idealists get their hands on the public purse. A venal sin. Gunwalker is what happens when you arm criminal gangs. Murder – a mortal sin (yes, pun intended)

  • kerry

    Solyndra: Cash for clunkers.

  • JKB

    “Government frequently cares more about how something looks (to key groups of supporters, to the press) than about what it does.”

    What? Surely, no one in government would email about this, only using the term, “optics” for the longer phrase of “how something looks.”

    It is very sad in government. These are in general smart people, who, credentialed out the wahzoo, can’t comprehend business. It’s not just this administration, I was dismayed at some things career GS thought would work, and that doesn’t even count the things that would get a private sector actor thrown in jail. Such as a two contracts, one to provide a vessel, the other to collect data. When I questioned the logic of not contracting one firm to do both, I was told, no one has done this before. To my detriment, I replied, “Yes, because it doesn’t make business sense.” “if the vessel couldn’t sail you had to pay the data collection contractor and if the data collection system didn’t work, you had to pay the vessel contractor.” Either way, you were paying a lot of money to someone and could very well never see one single bit of data, unless by happenstance both contractors had their part working at the same time. But that was how Congress wanted it.

  • Wendy Sporter

    TESLA TAKES GOVERNMENT TAX MONEY SAYING THEY WILL CREATE U.S. JOBS and then hires FOREIGNERS: : Look at the ads Tesla has placed on LInkedIn: “Senior Immigration Paralegal – Tesla Motors- Palo Alto, California (San Francisco Bay Area), etc…”

    Elon Musk made a deal with Dianne Feinstein to take over the NUMMI plant so it would look like she saved jobs but, in fact, almost no NUMMI staff were hired and Tesla does not even know how to set-up the factory.

    John Doerr & Steve Westly ran Steven Chu’s nomination and forced the White House to appoint him and then forced Steven Chu to fund their company: Tesla Motors.

    Tesla cooked the books to get DOE funding.

    The CEO & senior staff lied to the City of San Jose about building their car factory there and those communications are actionable.

    The CEO & senior staff lied to multiple other cities about building their car factory there and those communications are actionable. They always promise a city or country a factory or sales office and then pull out.

    The CEO has been sued by his staff, his wife, his business partners and his suppliers for manipulation and unethical behavior.

    The CEO paid GQ magazine to write a story about him to help him get dates. The CEO paid the marketing group for Iron Man to say that Iron Man was based on him. History has shown that megalomaniacs have destroyed every company they have run.

    The CEO cheated on his wife with escorts while married. The values of the CEO are the values of the Company. Eolon Musk hires most of the escorts in Silicon Valley.

    The car electromagnetic radiation fields from the battery pack cause cancer.

    They bribed officials to get their federal loan and the funds expended by them to get that loan are being traced back to sources. The McKinsey guys at DOE are connected on paper to Tesla in extensive conflicts of interest.

    He was $100,000.00 off, PER CAR, on the cost to build each car. The company has blown tens of millions of dollars on work it had to completely dump in the garbage and start over on.

    The company has numerous consumer complaints on price changes, overheating of the battery and charging system and inability to get 220V without huge premiums for the setup.

    Nobody is buying the cars anymore and there are hordes of competitors with better electric cars.

    (Free to repost)

  • Raymond Park

    Over 120 people associated with the Dept. of Energy, directly and indirectly, are now under criminal investigation by the FBI, DOJ, Treasury, OMB, GAO and multiple committees. What is coming out is that the DOE has operated as a CITADEL OF CORRUPTION and Secretary Chu should be indicted.

© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service
We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to and affiliated sites.