Fremont-Based Solyndra Goes Bankrupt; 1,100 Workers Laid Off

FREMONT (CBS SF) – A leading Bay Area manufacturer of solar power systems has abruptly shut down operations and laid off its staff while it sought to file for bankruptcy protection.

Solyndra LLC, which makes specialized cylindrical solar systems for commercial rooftops Wednesday announced in a statement that it was suspending operations because of unfavorable global economic and solar industry market conditions.

In the statement, Solyndra said it intends to file for Chapter 11 bankruptcy while it evaluates options, which could include selling the firm or its licenses.

Solyndra said as a result of the suspension of operations, some 1,100 full-time and temporary employees were being laid off effective immediately.

Solyndra workers learned as they arrived at the office that the recently-completed Fremont factory where they worked would be closing immediately.

“The only doors that are open are HR doors,” said Ronek Desai, referring to the human resources department where he received an unemployment packet.

KCBS’ Matt Bigler Reports:

Solyndra and other U.S. solar industry manufacturers have been affected by a worldwide plunge in solar cell prices, based in part on huge subsidies Chinese solar manufacturers receive from their government.

100967349 1 Fremont Based Solyndra Goes Bankrupt; 1,100 Workers Laid Off

(L-R) Chris Gronet lead U.S. President Barack Obama and Ben Bierman on a tour of the Solyndra (Photo by Paul Chinn-Pool/Getty Images)

The company had been under scrutiny after receiving a $535 million loan guarantee from the U.S. Department of Energy to expand its manufacturing facility in Fremont, along with a high-profile visit from President Barack Obama in May 2010.

During his visit to Solyndra and the new facility, President Obama showcased the company as a “testament to American ingenuity and dynamism” in line with his vision of developing green and alternative energy industries to compete with China and Europe.

Seven weeks later, Solyndra announced it was delaying expansion plans, shutting an older plant and laying off 150 workers.

In June, Solyndra abandoned a planned initial public stock offering, citing market conditions.

On Wednesday, Solyndra indicated that despite growth and large orders in 2011, it could not ramp up operations fast enough to compete with larger foreign manufacturers. Solyndra said the situation was “exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems.”

Solyndra’s president and CEO, Brian Harrison said in the statement: “We are incredibly proud of our employees, and we would like to thank our investors, channel partners, customers and suppliers, for the years of support that allowed us to bring our innovative technology to market. Distributed rooftop solar power makes sense, and our customers clearly recognize the advantages of Solyndra systems,” said Harrison.

“Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion. Raising incremental capital in this environment was not possible. This was an unexpected outcome and is most unfortunate,” Harrison said.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

  • Johhny Appleseed

    So much for Obama’s historic subsidy for solar. I feel sorry for the workers, who are suffering from another one of Obama’s great lies.

    • Kat

      Why it is Obama’s lie? Chinese gov. gives money as a grants to its solar plants, but Republican majority in Congress cuts the funds for American plant, although it was a loan not a grants.

      • Billy

        If you read the story you will see that it was a loan guarantee, which is the same as a grant. The US gov will have to pay the full amount. Whenever there is a need for a third party guarantee it means that the lender does not believe that the loan can be repaid. The deal was sour before the US got in.
        It’s like co-signing on an unemployed teenager’s car loan.

      • Bob

        Move to china then!

    • Miles Coatsee

      This unfortunate development raises plenty of questions that need to be answered, but there is no basis for saying that Obama lied about anything.

    • Doug Campbell

      im pro obama… but just because people are anti obama doesnt mean they are racist.

  • david mccrary

    This facility was once run by another co that went BK. Not in the same industry. Can’t recall its name now. So what happens to that $535 million guaranty? Will someone exercise the guaranty and make us pay for this too? WHen does it end?

    • john

      The old building was HMT, which was bought by MMC , which then bought out by Seagate..
      535 Million graranty by Gov.. will be paid by you and me and other tax payers.

    • Jake

      I know what you mean. It used to be a big red building with a very large “H” that can be seen while driving on 880. And to think that I was seriously considering applying for a job at Solyndra this week. Anyway, best of luck to Obama on wasting $535 million of the taxpayers money. What happens to the money? Do the creditors get it or do the taxpayers get it back? I wonder if Obama had also invested in Tesla motors. I guess they will be bankrupt soon too. This is why people do not like alternative energy. It costs too much to develop and Americans don’t have a clue on how to develop it.

  • Obvious

    Of course there was no mention that the failure was a result of flawed technology. Its easier to blame everything else. Bozos in the DOE need to be replaced with competent EE’s but that will never happen.

    • RC

      You are dead nuts on, I worked in fuel cells and it was a joke with about 10 different government agencies involved all doing the same kind of work

  • rrr

    Government loans never work. A bunch of losers in the government and in solar industry who will never understand the physics and limitations of the technology and therefore always promise pie in the sky to morons like Obama who use it to show how nice to the planet his administration is.

    I think they had it coming.

    • Kat

      But it works in China. Morons like Republicans majority in Congress prefer as to buy Chinese solar panels.

      • Billy

        Who sez it works in China?

        China pays to make all kinds of things that are dead losers. Free land, free factories,free workers, massive overcapacity. Next year they will make something else. it is a shotgun approach to keep workers busy. Lots of what they make they can’t sell at all. They practically give it away on Ebay.

      • patriot23

        Chinese factory’s have gun towers around them. If you had to work for free then the fruits of your labor would would be much cheaper as well. How about the 15 billion (note the B in billion ) that we the people used to purchase GM and then gave all the Obama ass kissers top shelf benefit packages. The problem with you liberals is you can NEVER admit when you are WRONG.

      • AP

        “But it works in China. Morons like Republicans majority in Congress prefer as to buy Chinese solar panels.”

        Prefer as or prefer us? Who’s the moron?

      • Kent

        Dp you comparison shop and choose the absolute cheapest priced goods you can find at Wal-Mart and elsewhere? Why YES, you do. Then why on earth are you attempting to blame others for what YOU choose to buy? Outsourcing would not exist except for DEMAND, and YOU can blame that on what YOU put in your shopping cart! Go look in the mirror, hypocrite.

  • valdobiade

    Let’s go back to petroleum pollution and big fat oil monopolistic corporations.

    • Pedefisk

      Go back? Oil companies are recording record GAINS while we suffer at the pumps, and other areas dependant on oil, because of their GREED. It’s still here and I fear, will be for a long time.

      • denis

        Oil is a commodity.OPEC sets the price not the oild companies. Obama restricts drilling so we buy from the middle east and south america. When Obama put the hold on drilling in the gulf the drills were moved to South America.

  • RC

    Another Obama investment and jobs idea.

    • valdobiade

      Obama should invest in wars in Mid Eastern as Bush et Co did.

      • Maal Member

        I do believe he TRIPLED the number of soldiers in Afghanistan, but it wasn’t a “troop surge”, because Obama never could bring himself to admit that it worked when Bush did such a thing. Afghanistan has gone to hell under Obama’s care, and that was the one thing he said would be his priority with regards to such matters. Of course, he’s f’ed up everything else he said would be a “priority”, so at least he’s been consistent. Stop pointing fingers at Bush. Time to find another excuse …

      • Mark

        Obama is investing in wars.
        Libya – illegal war over $1billion spent
        Pakistan – Drone attacks almost daily – $1billion spent
        Yeman, Somalia, — Get the picture. Please stop blaming bush for Obama faults and open your eyes.

  • John John G

    Chinese government simply spent more than US did. That’s all.

    • tony williams

      That is correct The Chinese are outspending us in all of the critical technologies, while we argue if the government are supposed to help, Republicans are always telling us that it should be done by private financing, tell me who has that kind of money right now…the stock market is in shambles and companies are hoarding cash. They tried to go IPO and access private money, there were no takers, we are letting politics get in the way of creating jobs, who cares if government or private create jobs, as long as you have a job. A lot of these Republicans have a job in Washington, why don’t we stop paying these guys and let them all go home.

      • Jay Vee

        Wow, really? Or is it just that the Gov. Owns all businesses and there is no profits to gain from its citizens.

      • EJ

        They didn’t get private money because private money is too smart to invest in outdated technology. Too bad the Government isn’t! I guess it’s easy when you are spending someone else’s money!

    • Christopher A. Pinola

      China is the GREATEST COUNTRY IN THIS WORLD, China is investing in it’s PEOPLE and COUNTRY The United States of America is YESTERDAY’S NEWS

      • Jay Vee

        China got better because WE gave them TECH on all sorts of industries to get them moving. They have more capital now because of where they cut back.thats all. Lets see population control, low wages, they put the housing above their factories, no property, no religion and the list is ENDLESS. I would rather have FREEDOM above money. Now how many people have they killed so far ? yeah I thought so.

    • Perry

      Worked int he oil/chemical industry for 15 years and proud of it, sure they are making money, it’s not greed, it’s called good business managers!! Funny how no one paid attention them when they were losing their a$$!

  • tonyj

    China seizes the Solar Panel market much the way the won the steel market. They are aggressively pushing their way into renewable energies because they know there will be an increasing demand for their renewable products . We, the U.S. is competing for the same energy resources as China, and China is a bigger country with a growing economy, an economy with greater energy needs. Ultimately, as their demand for oil increases, there will be less oil for everyone, and we will increase our demand for solar panels from China. This is a Win Win for China.

    • Prasad Seshadri

      Yes, Problem with Western nations is that they are hobbled by Quarterly results and elections which a country like China can make long term investments.

  • Brant Williams

    Just a manifestation of the “Green Power” cult mentality in this country. The simple truth is, there are not really many meaningful and scalable power generation methods out there. Nothing really significant has been discovered since the 40’s. It is now becoming VERY clear that conventional petroleum production peaked in 06 or 07. People who think that all these fantasy green power schemes can replace the pure mass of energy provided by petroleum never passed a physics, thermodynamics, or math class. They have no idea how much energy is consumed by our transportation system, or how our sprawl (suburban lifestyle, which drives down population density, making mass transit nearly impossible) multiplies this. Heck…most do not even know what a joule is. Long term, we are in for some very hard and very trying times… and the arrogant fools in the tech sector who think they are capable of saving us because they started up some internet company are a joke….

    • valdobiade

      BW: People who think that all these fantasy green power schemes can replace the pure mass of energy provided by petroleum…

      Green power? Just a figment on sick people imagination…
      (Of course I am being sarcastic)

  • Chris Finnegan

    This is yet another prime example of why competition will always be less productive, efficient and cost effective than collaboration.

  • Valley_Veteran

    You do not have to be a rocket scientist to figure out that this company was doomed from the very beginning to fail. I am surprised that with so much talent in bay area the government could not double check in what they were investing in. With a cost of $4/watt to start with it was bound to fail. Equipment development is a very expensive ordeal and until the product is mass used and has a mass appeal one can forget trying to recover the equipment cost. I am afraid that there are other companies in the bay area that will follow the same path. trying to build a product for roof top only is just not economical.
    Respect the experience of the veteran engineers and let them mentor and guide the younger generations in validation of emerging industries so they are properly harnessed. The attitude of get rich quick with Internet type set mode for these industries will not work. There should be no manager in these types of industry who have less than 20 years of experience. If some internet savvy guy who made few millions in the internet boom and started a company to leverage the market, such companies are bound to fail. My heart reels to see such failure because things are managed by the wrong people by using the wrong inside and outside resources. The whole hiring process of the employees must have been bad and the Venture Capitalists must be looking for a government like model to run such companies

  • kim

    And the CEO is ‘thanking everyone…how about me and you who are on the line for the gov’t guraranteed loan??? I live in the bay area not far from this place..YOu should see the building. No expense was spared in building this monument. Should sell it to O and he could use it for the presidental library.

  • Don

    The company had been under scrutiny after receiving a $535 million loan guarantee from the U.S. Department of Energy.

    And the fat cats at the top will get a golden parachute.

  • Bagger

    Tesla right down the street will be the next to go in a few years once they burn through their $500 million loan guarantee.

    • valdobiade

      Yep, resistance from oil companies is big and fierce. They have more money and power to derail solar energy research.
      I commute through the city at 25-35 miles per hour, and I see long lines of cars using gas. At these speeds nobody needs to use oil powered cars. It is polluting and fattening the pockets of monopolistic oil pigs.
      Tesla should make “city” cars not expensive electric sport cars.

      • gb

        Actually, commuter cars are an excellent application to solar power. Charge up while at work each day for the commute home and the commute back to work the next day. Most of the time the car just sits… so charge it up during that time. It just happens to be the best time of day for solar collection as well.

      • Mark

        Electric cars require electric plants which burn natural gas or nuclear energy.
        Solar and wind will never be the answer. Once again get real and think about what your saying.

  • Atul

    First Nummi and now Solyndra….fremont is in bad shape

  • Atul Arora

    First Nummi and now Solyndra….fremont is in bad shape

    • User

      Then Tesla, and then Fremont itself……

  • Lan Dawei

    My heart goes out to those who lost their jobs today. However, I was not happy that Solyndra received so much money in federal subsidies. I oppose this redistribution of wealth. Whether it is for farmers or high tech. Let the private sector put their money where their mouth is and subsidize this industry.

    There will be better results.

  • Josh L

    They shouldnt have spen all their money building those fancy new buildings. Geez they just completed it a couple months ago, what a waste

  • Alex Tong

    Here goes our tax money. Who is next?

  • Mark ONeill

    What this means is that we must be very afraid every time the President mentions the word “Invest” because if this is how he “Invests Our Money” then we are all in trouble!

  • Mat

    No expense was spared on Solyndra’s high-end campus. All facilities are of top quality and materials. Total mismanagement.

  • HealthyBreeze

    Solyndra’s product arhictecture was inherently expensive no matter how many robots their factory had. First Solar with plants in Ohio, Germany and Malaysia, and expanding in Arizona, has a much more cost-efficient architecture, they operate at scale, and are still profitable even in the global solar market slowdown. Solyndra was mismanaged, no doubt. Solar is still the way to go to reduce dependence on fossil fuels. The Chinese are formidable, so we really could use a big, predictable domestic market for solar to help get our industry up to speed.

  • Dave

    In todays global market US has to develop long term strategy and plan to compete globally. With a forsight into the future global marke,t this should have been done a decade ago. Well still not too late to start working on it immediately. In absence of comprehensive global market competitive plan it is just a matter of time when you see another hightech company in Bankruptsy.

  • Obamasux

    Obama handing out money again…and YES- Tesla is the next failure we gave $500MM to! What the USA needs is to stop being led around by the “Supply Side” and their corporate shills and flex our DEMAND Muscle! We are the #1 market on the planet- if you want to sell imported products here you will pay the IMPORT TARIFF! End ALL Nafta & “Free Trade” agreements and impose IMPORT TARIFFS! This will instantly end all budget problems, allow the lowering of taxes on everyone and is GREEN as they will not need to ship products from China on fuel-oil burning ships that have zero smog abatement systems!

  • S

    This was more of company issues than Obama’s fault. When a company has to go bankrupt, the problems usually come from within, not the investors that gave them money. I believe that the company caved due to competition, lack of appropriate action and probably the demand for solar panels, among other internal things.

    • Jay Vee

      Let’s say the truth Government Regulations make it impossible to competre.

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