Solyndra faces layoffs despite stimulus loan
FREMONT, Calif. (KGO) -- New competition from China is causing layoffs at Fremont's Solyndra, a solar panel maker that received a stimulus loan last year to build a new factory.
Solyndra was the epitome of what the government envisioned to be our green tech future.
President Obama, Gov. Schwarzenegger and Sen. Barbara Boxer, D-CA, toured the solar panel production line. Confidence was so high that Solyndra got a $535 million stimulus program loan to build a new factory along I-880 in Fremont.
Now there is word it will shut down its older plant down the street -- 40 employees will be laid off and 150 contract workers won't be renewed. The reason is price competition from lower cost Chinese solar panel makers, and Solyndra says it needs to cut its expenses so it can drop its prices.
"Today we would be somewhere in a $3 to $4 per watt basis. We need to be at a $2 per watt basis all-in, which is fully installed on the roof with panels and mounts on the rooftop," Solyndra spokesperson David Miller said.
Suddenly, the future isn't as bright as it was a year ago and taxpayer money is on the line.
Solyndra's shiny new plant cost $733 million -- $535 million came from federal funds. Only $198 million is for private financing, so the government's stake is 73 percent.
According to a filing by Solyndra with the Securities and Exchange Commission, if it were to default on the $535 million loan, the Dept. of Energy would end up owning that brand new fabrication plant as well as the land underneath.
Public records show that about $402 million of the loan proceeds have been dispersed. The lion's share, $262 million went to the contractor and smaller amounts to a design firm, a developer and to the county for taxes. So a lot of public money is riding on Solyndra to succeed.
"It's not going to be worth anything if you have to foreclose. If you want to loan me money on my house, you can do that. If I don't pay, you can take the house back. And if there's equity in the property, you resell it and you won't lose a penny. But with a property like this, it'll be vacant for who knows how long?" real estate attorney Ron Rossi said.
Solyndra says mothballing its older plant and laying off workers will save $60 million.
fremont, solar energy, layoff, stimulus funds, economy, business, david louie
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