Obama’s Solyndra a remake of a Deval Evergreen production

by Datechguy | September 4th, 2011

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Obama's Solyndra a remake of a Deval Evergreen production

“It’s like Ever­green solar on a cos­mic level”

Nate Lit­tle, exec­u­tive direc­tor of the Mass­a­chu­setts Repub­li­can Party Jan 2011, on Pres­i­dent Obama’s SOTU Speech

They’re two lead­ers who have a sim­i­lar long-​term vision’’

Greg Bialecki Mass­a­chu­setts sec­re­tary of hous­ing and eco­nomic devel­op­ment on Deval Patrick & Barack Obama. Jan 2011

It’s a shock and a boon­dog­gle for tax­pay­ers. A green energy com­pany touted by envi­ron­men­tal­ists and used as a photo-​op by the chief exec­u­tive is given mil­lions of dol­lars of gov­ern­ment sup­port to “cre­ate jobs” now files for Bank­ruptcy leav­ing tax­pay­ers pay­ing the bill, work­ers out of work and pols scram­bling for expla­na­tions.

Ah but it’s not what you think, this movie is not about Solyn­dra it’s the story of Ever­green Solar, touted by Deval Patrick, show­ered with Mass­a­chu­setts tax­payer funds which filed for Bank­ruptcy in August 2011.

Ever­green Solar Inc. filed for Chap­ter 11 bank­ruptcy pro­tec­tion yes­ter­day, com­plet­ing a stun­ning rever­sal of for­tune for a high-​flying alternative-​energy com­pany that once seemed to her­ald a new era for the Mass­a­chu­setts economy.

It was just a few years ago when Deval Patrick made his big move to court the money los­ing Ever­green Solar to the state:

In 2007 Gov­er­nor Deval Patrick decided to “lure” a com­pany called Ever­green Solar to the state. In one of the largest invest­ments the state has ever made in a pri­vate com­pany, Mass­a­chu­setts tax­pay­ers paid Ever­green some $58 mil­lion dol­lars to locate a plant there. Curi­ously, Ever­green wasn’t even remotely prof­itable at the time.

Strange, the Globe story last month called it a “rever­sal”, yet the com­pany was awash with red ink at the time of the deal (over 340 mil­lion+ accord­ing to the WSJ). That didn’t keep the Boston Globe from show­cas­ing the deal as an exam­ple of Deval Patrick cre­at­ing jobs:

Ever­green Solar’s CEO, Richard M. Feldt (right), says Gov­er­nor Deval Patrick’s com­mit­ment to solar power played a key role in the company’s deci­sion to expand in Massachusetts

Alas, the happy times didn’t last, it was only 19 months later that Ever­green announced that they were cre­at­ing new jobs…In China:

Ever­green Solar is shift­ing some of its pro­duc­tion, cur­rently done at a plant in Devens, to China next year, after post­ing an $82 mil­lion loss in the third quarter.

But Gov. Deval Patrick looked at the bright side:

I’m dis­ap­pointed about the man­u­fac­tur­ing,” Patrick said, “but I’m delighted that they will con­tinue to grow jobs in Mass­a­chu­setts and they will be a part of our emerg­ing clean tech sector.”

The exact num­ber of jobs to be lost wasn’t spec­i­fied at the time, but 14 months later the Globe dis­cov­ered the num­ber… …all of them:

Ever­green Solar Inc., which received $58 mil­lion in state aid to open a fac­tory in 2008 at the for­mer mil­i­tary base in Devens, announced today it would shut the plant and let go 800 work­ers by the end of this quarter.

Nat­u­rally con­ser­v­a­tives were not sur­prised and asked ques­tions:

Who did the analy­sis? Who gave the go-​ahead to give the com­pany $58MM?

And even envi­ron­men­tal eco­nom­ics blogs asked ques­tions:

All econ­o­mists know that you have to tell a pow­er­ful exter­nal­ity (pos­i­tive spillover) story to jus­tify strate­gic sub­si­dies of indus­tries. Did the Gov­er­nor com­mis­sion such a study? For the “researchers” who did the study, what evi­dence did they provide?

but those ques­tions weren’t quickly answered:

The Patrick admin­is­tra­tion yes­ter­day dragged its feet on releas­ing pub­lic records of its ill-​fated, $58 mil­lion tax­payer invest­ment in Ever­green Solar even as energy experts ques­tioned why offi­cials ignored early warn­ings that the firm’s new Devens plant stood lit­tle chance against cut­throat over­seas competition.

But not to worry said the state at the time:

Mass­a­chu­setts offi­cials noted the state may have the oppor­tu­nity to recover some of the funds Ever­green received.

and as late as March the Gov­er­nor insisted that it wasn’t a loss for the state

The gov­er­nor also dis­puted that the state was a net loser in the deal bro­kered by his admin­is­tra­tion. El-​Hillow has said he may pay back some of the state assis­tance but not all, say­ing his company’s inten­tion is to “honor” the agreement.

I would say that the actual math of it sug­gests that the com­mon­wealth just about broke even, when you con­sider the income taxes on the pay­roll, but it’s still a blow, and it’s not the com­mit­ment that they made,” said Patrick.

And I’m sure he believed it…right up ’til the end.

Michael Gra­ham noted it could have been a lot worse if Patrick got his way:

Patrick orig­i­nally wanted to give them $100 mil­lion, and in 2009 “offered Ever­green more than $76 mil­lion in grants, land, loans, tax incen­tives and other aid,” accord­ing to The Boston Globe-​Democrat.

He’s right. It could have been worse, it could have been as bad as the remake Debra Saun­ders watched:

Solyn­dra had not turned a profit since it was founded in 2005. The plant in which Obama stood was bankrolled with a $535 mil­lion fed­eral loan guar­an­tee. Two months before, Price­wa­ter­house­C­oop­ers ques­tioned Solyndra’s “abil­ity to con­tinue as a going concern.”

If the pres­i­dent wants to send a pos­i­tive mes­sage on the U.S. econ­omy, I won­dered, then couldn’t his peo­ple have found a Cal­i­for­nia com­pany that doesn’t rely on a fed­eral loan and actu­ally makes money?

Bad advance work, I figured.

A month later, Solyn­dra can­celed a planned $300 mil­lion pub­lic offer­ing. In Novem­ber, Solyn­dra closed its older plant and cut its work­force. Today Solyndra’s lights are out.

None of this explains the why. Per­haps it’s because nei­ther Deval Patrick nor Barack Obama asked Rea­son online to explain the facts of life:

Politi­cians are not ven­ture cap­i­tal­ists, they aren’t mar­keters, and they cer­tainly are not inno­va­tors. Whether or not a com­pany suc­ceeds or fails, is green or brown, or employs work­ers in Amer­ica or China doesn’t mat­ter. What mat­ters is that this all be deter­mined by pri­vate investors who know the risks going in and have a stake in the cap­i­tal, loca­tion, and tech­nol­ogy needed to either fail or succeed.

What this Solyn­dra story adds up to is just another Hol­ly­wood squeal that’s worse than the orig­i­nal. It does have one advan­tage for Amer­i­can view­ing public:

Solyn­dra unlike Ever­green didn’t implode two months after it’s patron won re-​election.

“It’s like Evergreen solar on a cosmic level”

Nate Little, executive director of the Massachusetts Republican Party Jan 2011, on President Obama’s SOTU Speech

“They’re two leaders who have a similar long-term vision’’

Greg Bialecki Massachusetts secretary of housing and economic development on Deval Patrick & Barack Obama. Jan 2011

It’s a shock and a boondoggle for taxpayers. A green energy company touted by environmentalists and used as a photo-op by the chief executive is given millions of dollars of government support to “create jobs” now files for Bankruptcy leaving taxpayers paying the bill, workers out of work and pols scrambling for explanations.

Ah but it’s not what you think, this movie is not about Solyndra it’s the story of Evergreen Solar, touted by Deval Patrick, showered with Massachusetts taxpayer funds which filed for Bankruptcy in August 2011.

Evergreen Solar Inc. filed for Chapter 11 bankruptcy protection yesterday, completing a stunning reversal of fortune for a high-flying alternative-energy company that once seemed to herald a new era for the Massachusetts economy.

It was just a few years ago when Deval Patrick made his big move to court the money losing Evergreen Solar to the state:

In 2007 Governor Deval Patrick decided to “lure” a company called Evergreen Solar to the state. In one of the largest investments the state has ever made in a private company, Massachusetts taxpayers paid Evergreen some $58 million dollars to locate a plant there. Curiously, Evergreen wasn’t even remotely profitable at the time.

Strange, the Globe story last month called it a “reversal”, yet the company was awash with red ink at the time of the deal (over 340 million+ according to the WSJ). That didn’t keep the Boston Globe from showcasing the deal as an example of Deval Patrick creating jobs:

Evergreen Solar’s CEO, Richard M. Feldt (right), says Governor Deval Patrick’s commitment to solar power played a key role in the company’s decision to expand in Massachusetts

Alas, the happy times didn’t last, it was only 19 months later that Evergreen announced that they were creating new jobs…In China:

Evergreen Solar is shifting some of its production, currently done at a plant in Devens, to China next year, after posting an $82 million loss in the third quarter.

But Gov. Deval Patrick looked at the bright side:

“I’m disappointed about the manufacturing,” Patrick said, “but I’m delighted that they will continue to grow jobs in Massachusetts and they will be a part of our emerging clean tech sector.”

The exact number of jobs to be lost wasn’t specified at the time, but 14 months later the Globe discovered the number… …all of them:

Evergreen Solar Inc., which received $58 million in state aid to open a factory in 2008 at the former military base in Devens, announced today it would shut the plant and let go 800 workers by the end of this quarter.

Naturally conservatives were not surprised and asked questions:

Who did the analysis? Who gave the go-ahead to give the company $58MM?

And even environmental economics blogs asked questions:

All economists know that you have to tell a powerful externality (positive spillover) story to justify strategic subsidies of industries. Did the Governor commission such a study? For the “researchers” who did the study, what evidence did they provide?

but those questions weren’t quickly answered:

The Patrick administration yesterday dragged its feet on releasing public records of its ill-fated, $58 million taxpayer investment in Evergreen Solar even as energy experts questioned why officials ignored early warnings that the firm’s new Devens plant stood little chance against cutthroat overseas competition.

But not to worry said the state at the time:

Massachusetts officials noted the state may have the opportunity to recover some of the funds Evergreen received.

and as late as March the Governor insisted that it wasn’t a loss for the state

The governor also disputed that the state was a net loser in the deal brokered by his administration. El-Hillow has said he may pay back some of the state assistance but not all, saying his company’s intention is to “honor” the agreement.

“I would say that the actual math of it suggests that the commonwealth just about broke even, when you consider the income taxes on the payroll, but it’s still a blow, and it’s not the commitment that they made,” said Patrick.

And I’m sure he believed it…right up ’til the end.

Michael Graham noted it could have been a lot worse if Patrick got his way:

Patrick originally wanted to give them $100 million, and in 2009 “offered Evergreen more than $76 million in grants, land, loans, tax incentives and other aid,” according to The Boston Globe-Democrat.

He’s right. It could have been worse, it could have been as bad as the remake Debra Saunders watched:

Solyndra had not turned a profit since it was founded in 2005. The plant in which Obama stood was bankrolled with a $535 million federal loan guarantee. Two months before, PricewaterhouseCoopers questioned Solyndra’s “ability to continue as a going concern.”

If the president wants to send a positive message on the U.S. economy, I wondered, then couldn’t his people have found a California company that doesn’t rely on a federal loan and actually makes money?

Bad advance work, I figured.

A month later, Solyndra canceled a planned $300 million public offering. In November, Solyndra closed its older plant and cut its workforce. Today Solyndra’s lights are out.

None of this explains the why. Perhaps it’s because neither Deval Patrick nor Barack Obama asked Reason online to explain the facts of life:

Politicians are not venture capitalists, they aren’t marketers, and they certainly are not innovators. Whether or not a company succeeds or fails, is green or brown, or employs workers in America or China doesn’t matter. What matters is that this all be determined by private investors who know the risks going in and have a stake in the capital, location, and technology needed to either fail or succeed.

What this Solyndra story adds up to is just another Hollywood squeal that’s worse than the original. It does have one advantage for American viewing public:

Solyndra unlike Evergreen didn’t implode two months after it’s patron won re-election.

DaTechGuy on DaRadio Saturday Noon EST. WBNW AM 1120 Concord WPLM 1390 Plymouth WESO 970 Southbridge, FTR Radio, the 405 Media

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