Yet another Solyndra: Failed "green" automaker Fisker means that $139 million loan won't be repaid

From Fox News:

Taxpayers are on the hook for a multi-million-dollar tab after a U.S. Department of Energy gamble on a green automaker went into the red. 

The Obama administration announced Friday it will lose $139 million on a loan to struggling electric car maker Fisker Automotive Inc. after selling part of the loan to a private investor that immediately took the company into bankruptcy. 

The transaction brings to an end another effort by the Obama administration to use public funds to stimulate green initiatives. Awarded a $529 million loan guarantee by the administration in 2009 to produce the Karma, a $103,000 luxury hybrid car, Fisker failed to meet DOE benchmarks, causing it to lose its loan guarantee two years later. The company drew down on $192 million before its federal funding was pulled, and the Obama administration seized $21 million from the company in April to help repay taxpayers. . . . .

Fisker: Another government investment is about to go bankrupt after a half-billion-dollar federal loan

It has been clear for well over a year that Fisker was having trouble.  From Fox News:

Fisker Automotive -- the electric-car maker that was granted a half-billion-dollar federal loan and on Friday dismissed about 75 percent of its remaining workforce -- is purportedly facing a lawsuit from the same firm that sued the government-funded Solyndra company. . . . 

Employees told the publication they were give no severance pay besides compensation for unused vacation days. . . .  

A source told the news agency that Fisker will retain about 53 senior managers and executives to primarily help sell off company assets. 

Fisker has received $193 million of a $529 million Energy Department loan, mostly for work on its luxury Karma vehicle that sells for about $100,000. The deadline to repay the loan is purportedly in late April. . . .

Democrats not backing away from government Solyndra type investments

Democrats still think that they are better than investors at deciding where the best investments are.

Silicon Valley’s Democratic representative said Republicans would handcuff U.S. competitiveness in clean technology if the GOP succeeds in ending a federal loan guarantee program. 

Rep. Mike Honda (D-Calif.) said in a Thursday column in The Huffington Post that the “No More Solyndras” bill pushed by Republicans would stifle innovation. 

“There is an urgent need for investment in new technologies in America,” Honda said. “There is an urgent need for venture risk in America, and the federal government must be involved through programs like the Department of Energy's loan guarantees.” 

The bill is scheduled for a Friday vote. It would sunset the federal loan guarantee program that gave California solar-panel maker Solyndra a $535 million loan guarantee from the government, only to have the company go bust in 2011. . . .

Congressman Honda argues:

There is an urgent need for investment in new technologies in America. There is an urgent need for venture risk in America, and the federal government must be involved through programs like the Department of Energy's loan guarantees. . . .

But the question isn't whether there should be investments, the question is whether the government should be deciding where to make investments.  The two are quite different points.

More Federal Government Loans going out to weak energy companies

From Fox News:

SoloPower closed on a guaranteed government loan of $197 million last August, about the time another solar panel manufacturer, Solyndra, filed for bankruptcy. The failure of Solyndra cost U.S. taxpayers more than a half-billion dollars. 

The second solar panel maker that received a loan from the Department of Energy, Abound, is also now in bankruptcy. Based in Longmont, Colo., Abound spent $70 million of its green energy loan and next week will auction off its equipment in hopes of paying some of that back. 

Industry analysts are not optimistic about SoloPower's prospects. 

"It's questionable at this point," says Andrew Soare of Lux Research, "It's uncertain if solar power will be able to produce efficiently and economically at scale. It's something that has not been done yet, and it's still risky." . . .

Fundraiser who pushed Solyndra loan favored guest at Dem National Convention

From ABC News:

. . . The Obama campaign rolled out the red carpet this week for a former top Energy Department official who was at the center of the ill-fated government loan to Solyndra, a California solar panel firm that wound up in bankruptcy. . . . 

Spinner was last in the headlines in October, when emails surfaced showing he had pushed for the Solyndra loan from his post in the Energy Department, apparently in an effort to score the loan as a political victory for President Obama.   

"How hard is this? What is he waiting for?" Spinner wrote in one of them. "I have OVP [the Office of the Vice President] and WH [the White House] breathing down my neck on this." . . . 

ABC News made repeated attempts to interview Spinner as the Solyndra saga unfolded, and he declined. When he was approached by ABC News on the convention floor Monday, he bolted for an exit. A DNC employee blocked ABC News reporters from following Spinner as he broke into a run. "You can't follow people," the aide said, as he held up his arms to keep the camera from filming Spinner as he left the venue. . . . .

White House political pressure responsible for Solyndra loan

From Fox News:

A congressional report concluded Friday that "political pressure" by a White House eager to tout stimulus spending was largely to blame for fast-tracking the ill-fated $535 million Solyndra loan guarantee -- findings compounded by the release of an email that showed the former CEO once referred to the aid as "The Bank of Washington."  . . ."It is clear (the Department of Energy) should never have issued the loan guarantee to Solyndra," the report said, adding that a subsequent decision to restructure the terms "violated the plain language of the law."  . . .

HotAir has this: "OMB warned WH to cut losses on Solyndra," but their concerns were overridden by Jack Lew.

Instead of heeding her advice, Lew overrode the concerns and pushed for the second round of investors to attempt a rescue.  We ended up losing nearly four times what taxpayers would have lost had Lew and the DoE cut their losses when it became clear that Solyndra was a bad investment.  Why did the Obama administration take that risk?  The investors in Solyndra included George Kaiser, one of Obama’s bundlers from the 2008 election.

Lew got a promotion after this decision, while taxpayers got the shaft.  If that’s the incentive system in this administration, don’t be surprised to see many more Solyndras as Congress pulls back the curtain on Obama’s green-tech subsidy program, which got tens of billions of dollars from his bigger flop, the 2009 stimulus bill.  Congress will have to work overtime to get a sense of just how badly those dollars were spent. . . .

Abound Solar declares bankruptcy

Just this week Abound Solar announced it was declaring bankruptcy.

Abound Solar, a solar panel maker that received a $400 million loan guarantee from the federal government, announced on Thursday that it would file for bankruptcy amid plummeting prices and intense competition from Chinese manufacturers in the solar equipment market.
The failure of Abound, which tapped about $68 million of the loan guarantee before the Energy Department cut off its credit last September, comes after the collapse last year of Solyndra, another high-tech solar panel maker that had received federal funds. . . .
Abound Solar, of Loveland, Colo., with manufacturing in Tipton, Ind., had been struggling for months. In February, it announced it was closing its factory to conserve resources while it tried to start production of a more advanced product. The company produced panels that made electricity directly from sunlight using a chemistry called cadmium telluride, which was intended to have a cost advantage over the more common silicon cells. But that cost advantage eroded as silicon cells plunged in price.
Abound said it would file for bankruptcy next week and dismiss its 125 employees. . . .

Rep. Paul Ryan versus Goolsbee

For an academic, Goolsbee has a bad habit of either just following Democratic talking points or just making things up.  Points that I know he is sufficiently smart enough not to believe.  In the transcript below he has no problem attacking Romney for a company going under after Romney had left Bain,  and fails to acknowledge the inaccuracy of his attacks.  Ryan's comment was about the large portion of government money going to Obama supporters, not that all of it did.  Goolsbee's reference to a single McCain supporter is completely irrelevant.  The hope that "the Obama philosophy [is] to try to transform the government into only picking winners" is something that I can't believe Goolsbee believes.  How does it address the question of what is actually happening?  Why does Goolsbee believe that the government will have a higher success rate than private individuals investing their own money?  Even Wallace finds it necessary to bring Goolsbee back on track.  The transcript from Fox News Sunday is available here:

WALLACE: But let me just ask you, sir, do you see anything wrong with what Bain Capital did, and what lots of money, millions of dollars into this steel industry, the time when the steel was in trouble, what's wrong with that? 

GOOLSBEE: Well, it depends on how they did it. And as I say, they ought to turn over the annual records of the company.If you want to establish they did not have kind of a leverage buy out mentality of pulling the resources out of the company -- turn over the records and let the people see what the business record was. Don't just pick two or three companies that are the success stories and say look at these because that invites the ones that went wrong.In this case, the company did horribly but the investors did great. So, I think it's a little bit different than a normal investor philosophy which if we can turn the company around in a positive way, we benefit. This was the case where they canceled the pension, they drove the company into the ground but the investors from Bain actually profited a great deal. 

WALLACE: Let me follow up with Congressman Paul Ryan.Because the Obama campaign says the point of Romney economics is to make money for Bain, to make money for their investors, even if all of the workers get wiped out. And in this particular case, with the steel mill in Kansas City, the workers and that plant went bankrupt. The 750 workers were laid off and Bain did make millions of dollars in profits. 

RYAN: You know what's ironic about this, Chris, Mitt Romney was running the Olympics during this time. He wasn't even running Bain during the time period in question.I think the individual if I'm not mistaken who was running Bain is a big Obama contributor.But for the point, Chris, what Bain did was they used private capital to help struggling businesses. What President Obama is doing is he's gambling with taxpayer money and giving money to corporate contributors, to campaign contributors like Solyndra and he's losing taxpayer money.So, what we have in the Obama administration is this crony capitalism, this corporate welfare where President Obama thinks it's right that we taxpayer dollars to give to private companies and take bets on these private companies. That's wrong.What is right is a private sector that you have risked that capital. You put capital in businesses whether they're struggling or not to try and grow those businesses, some succeed, some don't. On the net, when on Mitt Romney ran Bain, they were very successful. They created thousands of jobs, great success stories.But for the point, we don't think that the government should be in the position of picking winners or losers in the economy which is the result of the president's economics.  

WALLACE: Let me -- 

RYAN: The result of it is, we have stagnation. 

WALLACE: Let me let Mr. Goolsbee into that.I mean, what about the argument that, you know, it's the private sector. If companies want to take a chance, they take a chance. But the government shouldn't be picking winners and losers. 

GOOLSBEE: Well, that's two different arguments. The first one I actually think is a little bit cheeky because in several of these bankruptcy cases, you saw the investors profit by dumping the pension on to the government and actually getting bailouts from the government, which helped to cover the profits that were going to the investors.On the picking of winners, it is absolutely not the Obama philosophy to try to transform the government into only picking winners. By that I think Congressman Ryan is referring to things like in the midst of the crisis deciding to save General Motors and the auto industry. 

WALLACE: I think wait a minute. Without speaking for him, I think he's talking about things like Solyndra. . . .

"Watchdog finds Solyndra loan was 'rushed'"

From Fox News:

An internal investigation into a half-billion dollar federal loan to failed solar company Solyndra Inc. has found that a last-minute review by financial experts was rushed and completed in about a day. Those experts had concerns, but there's no evidence to show whether they were addressed by the Energy Department, which already had decided to approve the loan. The report, released Wednesday by the Treasury Department's inspector general, provides further evidence of serious concerns about a loan to California-based Solyndra pushed by the Obama administration. . . .

Another Solyndra? This time with up to $2.1 billion at stake

From the Washington Examiner:

Solar Trust for America received $2.1 billion in conditional loan guarantees from the Department of Energy -- "the largest amount ever offered to a solar project," according to Energy Secretary Steven Chu -- for a project near Blythe, Calif., but declared bankruptcy within a year. It is unclear how much of the guarantee, if any, was actually awarded. Senior officials in Obama's administration had very high hopes for the Blythe project. Interior Secretary Ken Salazar attended the groundbreaking ceremony, which he described as "a historic moment in America’s new energy frontier" and "another important step in making America’s clean energy future a reality." Chu trumpeted at the time that Solar Trust would prove that "when we rev up the great American innovation machine, we can out-compete any other nation." . . .

At the same time Fisker Automotive is having trouble.

Fisker Automotive's new chief executive, Tom LaSorda, said the luxury electric-vehicle company is looking at alternatives to building its second model in a former General Motors Co. GM -4.56% plant in Delaware, raising the possibility of abandoning a plan that had financial backing from the Obama administration. Mr. LaSorda also said Fisker is looking for strategic partners as part of its effort to raise new funds to replace a federal loan that was frozen earlier this year. Fisker was awarded a $529 million loan under an Obama administration program designed to spur production of advanced technology vehicles. Fisker drew about $193 million of the Energy Department loan to engineer its Karma luxury plug-in hybrid. But a plan to retool the former GM factory to build a second model, now called the Atlantic, was delayed . . .

Top Obama officials involved in deciding whether to keep Solyndra from going into bankruptcy

Are top political appointees in the WH typically involved in such loan decisions? From the Hill newspaper:

The company collapsed at the end of August 2011 and filed for bankruptcy in early September. The Hill has reported previously on the administration decision not to attempt a last-ditch financial rescue.

White House internal communications during the company's final days include an email about a planned meeting to discuss Solyndra on August 29, 2011. Heather Zichal, a senior energy policy aide, and Deputy OMB Director Jeffrey Zients were slated to brief other officials.

The list of optional attendees included several high-level officials, such as then-Domestic Policy Council Director Melody Barnes and Nancy-Ann DeParle, another senior adviser to the president. . . .

Obama on Solyndra: “But understand: This was not our program per se.”

Even ABC News is a bit incredulous. This sounds a lot like Obama claiming all economists supported his Stimulus program.

“Are you doing your ‘all-of-the-above’ strategy right if that’s what we have to show for it — Solyndra?” asked Kai Ryssdal, host of “Marketplace” on American Public Media, in an interview with Obama.
The solar energy start-up Solyndra, which had been the poster child of Obama’s initiative, went bankrupt in 2011, putting 1,000 employees out of work. It had received more than $500 million in federal loan guarantees through a Recovery Act program. The loan process is now the subject of a congressional investigation.
“Obviously, we wish Solyndra hadn’t gone bankrupt,” Obama said. “But understand: This was not our program per se.”
“Congress — Democrats and Republicans — put together a loan guarantee program because they understood historically that when you get new industries, it’s easy to raise money for start-ups, but if you want to take them to scale, oftentimes there’s a lot of risk involved, and what the loan guarantee program was designed to do was to help start up companies get to scale,” he said.
Obama mischaracterizes congressional support for the program, however. The loan to Solyndra was not part of a program developed by both Republicans and Democrats. Rather, it was entirely funded through the 2009 Recovery and Reinvestment Act, which did not receive any GOP votes. . . .

30 percent of Federal loan guarantees went to individuals with connections to the Obama administration (either fundraisers or staff)

Yet more subsidies for solar energy producers in the US

As if the all the massive subsidies from the Federal government in the form of loans, grants and loan guarantees weren't too much to begin with, now we need to add tariffs to the mix. From the WSJ:

U.S. trade officials slapped modest tariffs on imports of Chinese solar panels, giving a partial victory to solar-equipment manufacturers in the U.S. but stopping short of harsh duties that could spark a trade war.

Responding to a complaint by the U.S. unit of Germany's SolarWorld AG SWV.XE -1.06% and six other firms who complained about competition from Chinese rivals, the Commerce Department announced preliminary duties of between 2.9% and 4.73% on Chinese solar cells and solar panels.

The ruling found that Chinese solar manufacturers enjoyed some unfair government financial assistance that helped them become an export powerhouse. The U.S. imported more than $3 billion worth of Chinese solar cells and panels last year, double the amount of imports in 2010.

Tuesday's move may not be the final step. The Commerce Department is expected to rule by May 17 on a related complaint, that Chinese manufacturers are selling cells and panels at prices below fair value. If the department finds dumping, it could put additional, antidumping tariffs on the Chinese firms. . . .

Another Recovery Act Environmental "Success Story" goes bankrupt

At least the Obama administration was able to fund big salary increases for these executives. Another Recovery Act success story?

In the nine months since David Prystash was named Chief Financial Officer of A123 Systems — the battery manufacturer that received $390.1 million in federal and state subsidies — the company has laid off 125 employees and had a net loss of $172 million through the first three quarters of 2011. . . .

this month A123’s Compensation Committee approved a $30,000 raise for Prystash . . . . Prystash wasn’t the only executive to see a big raise this month. Robert Johnson, vice president of the energy solutions group, got a 20.7 percent pay increase going from $331,250 to $400,000, while Jason Forcier, vice president of the automotive solutions group, saw his pay increase from $331,250 to $350,000. Prystash’s raise was 8.5 percent, going from $350,000 to $380,000. . . .

When A123 Systems announced it was opening its lithium-ion battery manufacturing plant in Livonia in September 2010, then Gov. Jennifer Granholm wrote about it on the Huffington Post calling it “a Recovery Act success story.”

But there have been troubles for A123 Systems in the 17 months since then despite a lot of state and federal aid to prop it up.

The state of Michigan gave it a $100 million MEGA tax credit that is contingent on the company creating 300 jobs by the end of 2016. A123 Systems also received another $41 million in tax breaks and subsidies from the state. The Department of Energy awarded A123 Systems a $249.1 million grant. . . .

More on the waste and corruption involved in the process:

Other Solyndras are coming to light, the latest being Sapphire Energy. Its pond-scum-based biofuel still costs over $26 a gallon, but that doesn't matter when your executives give almost solely to Democrats.

The Washington Free Beacon reports that after $104.5 million in stimulus and other Energy and Agriculture Department funds for a New Mexico facility, it can boast just 36 new jobs. UC Berkeley's Energy Biosciences Institute says it'll take a decade before we know if algae-based fuel can compete with gas.

The Washington Post recently found "$3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers." . . .

White House ignores House subpoena's on Solyndra

So much for the most open administration every. Remember also the Obama administration claims that only nonpolitical officials dealt with this loan? From the Washington Examiner:

President Obama and his West Wing aides ignored a subpoena of documents pertaining to the Solyndra loan guarantee even after congressional investigators met with White House officials to negotiate the scope of the subpoena, according to the House Energy and Commerce Committee. . . .

House investigators requested 12 categories of documents designed to explore a range of issues, such as Obama donor and Solyndra investor George Kaiser's role in the solar company receiving a loan gaurantee.

White House counsel disputed the initial subpoena in November, calling it "a significant intrusion on Executive branch interests." Committee officials met with Obama's attorneys to negotiate the subpoena, but the White House failed to produce the documents by the February 21 deadline.

"Despite an all star cast of presidential aides that have their fingerprints on Solyndra," Upton and Stearns observed, "Larry Summers, Carol Browner, Ron Klain, Valerie Jarrett, David Axelrod, Jim Messina, Dan Pfeiffer, Jay Carney, Cecilia Munoz, -- the White House is having great difficult turning over relevant internal documents."

The investigators said that Obama's aides have not answered questions about the White House role in restructuring the Solyndra loan, who told Solyndra officials to delay announcing layoffs until after the 2010 midterms, and why the company received so much attention from senior advisers to the president. . . .

Another company getting Stimulus dollars goes bankrupt

From CNS News:

Ener1--a company that manufactures batteries for electric cars, and that received $118.5 million in federal stimulus money, and that Vice President Joe Biden visited last year the day after President Obama’s State of the Union Address—announced today that it has filed for Chapter 11 bankruptcy protection.

In last year’s State of the Union Address, delivered Jan. 25, 2011, President Obama set a national goal of having a million electric vehicles on the road in the United States by 2015—a goal that would be achieved, Obama said, by taking money out of the oil industry and “investing” it in new technology.

“With more research and incentives, we can break our dependence on oil with biofuels and become the first country to have a million electric vehicles on the road by 2015,” said Obama.

“We need to get behind this innovation,” he said. “And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's.”

The next day, Biden visited the Ener1 plant in Greenfield, Ind.—which the White House said at the time had received a $118.5 million grant from the Department of Energy and was the type of investment the president was talking about in his State of the Union. . . .

Solyndra destroying company assets?

Why would a bankrupt company that owes billions be destroying millions of dollars of assets? CBS's local affiliate in Fremont, Ca. has this investigation.

So are environmentalists admitting that their other green energy offerings aren't working?

The beginning of this article sure seems to concede a lot. It is too bad that this wasn't understood before we put all the Stimulus dollars into all this. From ABC News:

Geothermal energy developers plan to pump 24 million gallons of water into the side of a dormant volcano in Central Oregon this summer to demonstrate new technology they hope will give a boost to a green energy sector that has yet to live up to its promise.

They hope the water comes back to the surface fast enough and hot enough to create cheap, clean electricity that isn't dependent on sunny skies or stiff breezes — without shaking the earth and rattling the nerves of nearby residents.

Renewable energy has been held back by cheap natural gas, weak demand for power and waning political concern over global warming. Efforts to use the earth's heat to generate power, known as geothermal energy, have been further hampered by technical problems and worries that tapping it can cause earthquakes. . . .

Tesla stock falls by over 19% on Friday

Telsa's stock crashed on Friday. On Friday, two of the companies top engineers announced that they were leaving. And also Ford announced a relatively attractive hybrid car that will be about $18,000 cheaper than the base Tesla model S.

When Ford (NYSE: F) took the wraps off its impressive new Fusion sedan on Monday, analysts and industry watchers (including this humble Fool) immediately started pondering the possibilities: Would this be the car that would finally knock Toyota's (NYSE: TM) Camry off its best-selling pedestal?

The answer to that question isn't simple. Toyota has had its troubles but retains fierce consumer loyalty, but a couple of days after the car's debut, another question struck me: Could the Fusion -- specifically, the Fusion Energi, a plug-in hybrid version that's due later this year -- be a problem for Tesla Motors (Nasdaq: TSLA)? . . .

On the top engineers leaving, it raises the question about what they know about the company's future.

Having traded in a tight range for most of the day, Tesla Motors (TSLA) collapsed in the last 45 minutes of trading on Friday. The stock hit a low of 22.64 and closed at 22.79, down 19.3% from its previous close. Although it was reported to have bounced 7% in after hours trading, the price action remains a clear worry. More worryingly, the move took place on what became the third highest volume day of the last 52 weeks - with just over 5.5 million shares changing hands.

The stock indeed closed down 35% from the $35 high it saw twice in November and December of last year.

The move took place after Tesla confirmed that Chief engineer Peter Rawlinson and Nick Sampson, supervisor of vehicle and chassis engineering, had left the company.

Not much has been said publicly about the moves. However, in an emailed statement attributed to spokesman Ricardo Reyes, Tesla made the following comments to Investor's Business Daily -

"Having completed conceptual and design engineering work on Model S, Peter has decided to step away to tend to personal matters in the U.K., ... Nick Sampson is no longer with Tesla. He had fully transitioned from any Model S activities by the time of his departure." . . .