Obama's favorite green company calls it quits
1 Sep, 2011 21:48
Despite support from President Obama, a solar-panel manufacturer in California is closing its doors and laying off more than a thousand employees, citing foreign competition as the impetus that has made domestic production no longer “scalable.”
Solyndra Inc. announced that they will be filing for bankruptcy and sending 1,100 employees home immediately from its Fremont, CA plant since it cannot afford continue to produce products that encourage clean energy. The green energy prevailers were in the spotlight last year after President Obama visited the Fremont plant and touted the company for their energy-efficient manufacturing. With Obama’s encouragement, the US Energy Department put plans in motion last year for a $535 million loan guarantee for Solyndra, but GOP lawmakers fired back at the attempt, with Republican representatives going as far as to call Obama’s decision to support the company “a dubious investment.”Now mere months later, the company says it must shut down as foreign competition is creating products with prices that they can't compete against. “Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers,” the company says today in a statement. They go on that a slowing demand for solar panels coupled with a global market has rendered them unable to continue. Financial analyst Adam Krop adds to Bloomberg that he doesn’t expect anyone to step up and give the company another go. “I don’t see anyone swooping in,” says the analyst from Ardour Capitol Partner in New York. “I don’t see this technology as very viable in the long-term."Spectrawatt Inc and Everygreen Solar Inc., two other American-based solar power manufacturers, also called it quits in August. With the latest forfeit from Solyndra, stocks for both First Solar Inc. and Suntech Power Holdings dropped on Wednesday. Clean energy factories abroad also saw stocks drops, with companies in China all seeing declines this week. The Associated Press reports that heavy competition from those Chinese manufacturers has caused the price of solar panels to drop nearly 50 percent in 2011. “Chinese firms that have received billions of dollars in low-cost loans from state banks and have access to a well developed domestic supply chain for solar manufacturing," GTM Research analyst Shyam Mehta tells Reuters. He adds that Solyndra has been “swimming upstream ever since it entered the market,” despite the encouragement from Obama.Even with the president’s blessing, Republicans were weary of the federal loan, which Representatives Fred Upton from Michigan and Cliff Stearns of Florida calling Solyndra “the latest casualty of the Obama administration’s failed stimulus.”In an email to Bloomberg News today, Solyndra rep Damien LeVera confirmed that the company had already borrowed all but $8 million of the $535 million expected from the Department of Energy, but still couldn’t stay afloat.