Could Arizona’s First Solar Be the Next Solyndra? – 3$ Billion in Taxpayer Loans & “Biggest S&P 500 Loser”
First Solar, Inc. is a company that primarily focuses on the solar panel market. Based in Tempe, Arizona, First Solar is a company that has received taxpayer-subsidized loans to the “whopping” tune of $3 billion. Like Solyndra, First Solar has been trotted out by the Obama administration as a type of successful company that represents the future of “green technology” and America’s renewable energy revolution.
But all appears not well in green Zion.
When Solyndra Corporation stopped all business activity, filed for Chapter 11 bankruptcy and laid-off nearly all of its employees in early September of 2011, Americans learned they would be on the hook to pay back a $535 million taxpayer loan guarantee made to the company by President Barack Obama’s administration.
Further investigation revealed that several of the company’s shareholders and executives had made substantial donations to Obama’s campaign and had many meetings with White House officials prior to and after their loan approval.
A detailed report by The Washington Post concluded that “Obama’s green-technology program was infused with politics at every level,” plainly ignoring analyst advice that Solyndra was more than just a bad financial gamble.
The political scandal has created a firestorm of controversy, leading Republicans to begin investigations into Solyndra and other loan guarantees made by the Obama administration.
Republicans have claimed that White House officials pressured Solyndra to not lay-off workers until after the November 2010 elections because of concerns about political ramifications. The White House denied such allegations but new emails reveal that at the very least, Obama’s aides knew the layoffs were to occur.
The Obama administration knew before the 2010 election that Solyndra LLC, a solar-panel maker that received a $535 million U.S. loan guarantee, planned to fire workers, according to e-mails released today.
The messages don’t indicate that anyone from the White House directed Solyndra to delay announcing the layoffs until after the vote. Previously released e-mails, indicating the Energy Department urged Solyndra to postpone the cuts, have been cited by House Republicans who say politics influenced Solyndra’s award and last-ditch rescue bid that put taxpayers behind $75 million in private investment.
“Here’s the deal — Solyndra is going to announce they are laying off 200 of their 1200 workers,” Heather Zichal, a White House adviser, wrote to Carol Browner, then director of the office of Energy and Climate Change Policy, and other officials on Oct. 27, 2010. “No es bueno.”
“No es bueno” is right. Solyndra is just the tip of the iceberg, as multiple companies received government guaranteed loans. These companies are now under greater scrutiny, in particular because many of them appear to be struggling financially.
One of these companies is First Solar, which is based in Tempe, Arizona. First Solar, was considered the second-largest maker of PV modules worldwide and ranked sixth in Fast Company’s list of the world’s 50 most innovative companies. In 2011, it ranked first on Forbes’s list of America’s 25 fastest-growing technology companies. Like Solyndra, from 11,000 feet things looked bright for solar panel manufacturer.
But a new report by CBS News reveals that First Solar might be on the fast track to becoming another Solyndra. The report suggests that there are a handful of companies that are “having trouble paying the bills” and struggling financially.
CBS News reports “First Solar was the biggest S&P 500 loser in 2011 and its CEO was cut loose – even as taxpayers were forced to back a whopping $3 billion in company loans.”
As mentioned in a previous post, other highlights of the CBS News report include:
- Beacon Power was fortunate enough to receive a $43 Million investment, despite the fact that its debt was rated a CCC+ by S&P. This is well below investment grade and even the threshold for what would be considered a junk bond (BB). In fact, a CCC+ rating means that the investment has a 70% chance of failing in the long run. Indeed, Beacon has already gone bankrupt.
- Nobody from the Obama Administration’s Energy Department would agree to an interview. Referring to Energy Secretary Stephen Chu, the economist interviewed by CBS commented, “Tasking a Nobel-Prize winning mathematician with making investments for the government is like asking the manager of the New York Yankees to be the General in charge of American troops in Afghanistan. It’s that absurd.”
The report is another red flag about the risky projects that the Obama administration has had taxpayer dollars guarantee.
Americans for Prosperity recently has created an ad that will run in multiple markets that highlight “the outrageous cronyism and disregard for American taxpayers in the growing Solyndra scandal.”
Can we expect similar problems with Arizona’s First Solar?