After federal loans, solar company files for bankruptcy

The exterior view of Solyndra Inc. in Fremont, Calif., Monday, May 24, 2010. (AP Photo/Paul Sakuma)

August 31, 2011 12:17:18 PM PDT
Solyndra, a solar panel manufacturer, announced it is laying off 1,100 workers and will file for bankruptcy.

Solyndra employees couldn't believe they were packing up and saying goodbye this morning. Just yesterday they said everything seemed normal.

"The mood is not very happy. Everybody is kind of bummed out and really surprised. Everyone is kind of speechless right now. Nobody really knows what to think, nobody saw it coming," said former Solyndra employee Ronak Desai.

"Yes it's a very good company, a nice environment and I love it, but unfortunately this happened," said former Solyndra employee Mohammed Qureshi.

Solyndra's CEO Brian Harrison held a meeting with employees this morning to tell them that 1,100 people would be losing their jobs. Employees say he encouraged them to keep striving to do something different in the industry.

"It was kind of somber. There were shocked people there you know. You walk into your company and the doors are shut - just picture that," said former Solyndra employee Mike Wood.

The company released a written statement saying: "Global economic and solar industry market conditions have forced the company to suspend its manufacturing operations. Solyndra intends to file a petition for relief under Chapter 11 of the U.S. Bankruptcy Code while it evaluates options, including a sale of the business."

But inside employees say it doesn't look promising.

"We're done. There's a few people -- the engineers and directors are still around to disconnect equipment, but it sounds like it's a done deal," said Wood.

Analysts said that Solyndra had very innovative technology, but like many high-tech start-ups, there was always high risk.

President Obama visited Solyndra in May of last year to check out the sleek and very automated assembly line. The facility was financed largely by $535 million in taxpayer money. The Department of Energy in 2009 gave Solyndra a low-interest loan as part of the federal stimulus program - giving the government a stake in the company's success. But that investment has now gone sour.

Private investors have also lost their money, about the same half-billion dollars as the Department of Energy loaned Solyndra.

Analysts said the company's thin-film solar collectors used only 1 or 2 percent of the silicon that's used in standard solar panels. When silicon prices spiked in 2008 - that gave Solyndra a big advantage.

"Investors and entrepreneurs might have mis-appropriately thought that that price would stay high, but like any commodity, the price dropped and Solyndra was caught in that vice of having to keep up with Chinese and American vendors who were riding the price of silicon low," said solar industry analyst Eric Wesoff.

A kilogram of silicon can cost as much as $475 on the spot market in 2008, but it has fallen to $51 today, or even down to $45 in the futures market.

As part of its bankruptcy filing, Solyndra says it will try to put the company up for sale or license its technology. However, we're told Solyndra's technology is not likely to be compatible with what other solar companies are using.

Wesoff said to expect Solyndra's bankruptcy to be part of a solar industry shake-up. Other companies may have difficulty raising venture capital because of what happened.

Courtesy of KGO-TV San Francisco

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