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.
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.
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.
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