The Solyndra Debacle

Solyndra has finally declared bankruptcy and laid off most of their staff (1,100 employees, without adequate notice under State and Federal WARN Acts) after months of rumors over their viability.

I drove by the Solyndra construction site numerous times, and always wondered why they didn’t lease the nearby empty NUMMI factory site, instead of engaging in $1 billion in construction projects in one of the most expensive real estate markets in the world.

According to news articles, this was a possibility. In fact, Solyndra was looking at NUMMI for a third plant.

But that’s not how pork barrel politics works I guess – now taxpayers are on the hook for $535 million in DOE loan guarantees.

(A deeper analysis of the Solyndra debacle would go like this: Silicon Valley is a good place to recruit semiconductor engineers but possibly the worst place in the continental USA to build a plant according to the cost of land, labor, electricity, taxes, environmental compliance and the risk of earthquake.

But in order to unite politicians in a pork barrel scam, Solyndra executives had to promise a maximum number of research and assembly jobs in California, as well as shovel-ready construction projects.)

Solyndra reminds me of other Silicon Valley companies like Webvan and Metricom that burned $1 billion on construction projects, took their eye off the ball, and were shutdown. Except taxpayers are on the hook for Solyndra.

AQT Solar wisely chose the frugal approach:

“Rather than build a factory from the ground up, the company recycled a 1970s-era rental building. “We moved in here in eight weeks, put our first 20-megawatt line up and did it for under a million dollars. That’s on Chinese time,” said Michael Bartholomeusz, AQT’s chief executive.”

What Solyndra’s Bankruptcy Means For Silicon Valley Solar Startups
examiner.com: NUMMI out. Solyndra in?
KQED Archives: Solyndra
FBI agents search Solyndra’s Fremont headquarters
Forbes.com: White House worried about Solyndra default
wsj.com: Loan Was Solyndra’s Undoing
Solyndra execs to plead 5th at House hearing
cnn.com: White House counsel slams House panel’s Solyndra subpoena
Solyndra held off announcing layoffs until after 2010 mid-term elections

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