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U.S. solar company Solyndra tied to Asian supplies

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By Lou Kilzer
Friday, Sept. 23, 2011
 

The California solar panel company that left taxpayers responsible for a $535 million U.S. Department of Energy loan guarantee was outsourcing significant portions of its business to Asian companies, according to a Tribune-Review analysis of bills of lading from U.S. ports.

Solyndra LLC closed Aug. 31 and filed for bankruptcy protection this month, reporting debts of $783.8 million and assets of $859 million as of Jan. 1, according to papers filed in U.S. Bankruptcy Court in Wilmington, Del.

Chief Financial Officer W.G. Stover in court documents blamed Solyndra's demise on attractive funding subsidies and extended payment terms provided to its foreign competitors by their governments.

But Solyndra, which began shipping solar panels in July 2008, has tapped more than 60 foreign manufacturers to provide it with panels and related assembly goods, the Trib found through an analysis of shipping records maintained by ImportGenius, an international company that tracks imports into the United States.

During the past 12 months, Solyndra received 154 shipments of goods, primarily from companies in China, Malaysia and Singapore. The shipments weighed more than 2.83 million pounds.

That is a higher reliance on foreign products than some other companies involved in the DOE's "green" energy program, the newspaper analysis found.

For instance, BrightSource Energy Inc., another California solar manufacturer that received a $1.6 billion DOE loan guarantee, recorded zero bills of lading during the past year. Colorado-based solar panel maker Abound Solar, a recipient of a $400 million U.S. guarantee, received eight shipments from Europe.

Solyndra was the first company funded under the DOE loan program. The firm applied for conditional commitment during the administration of President George W. Bush, but funding was not implemented until after President Obama's federal stimulus program was passed in February 2009.

Most recent figures from the DOE indicate the agency issued loan guarantees totaling $38.6 billion, producing or preserving more than 60,000 jobs. Solyndra reported employing about 1,100 when it closed.

In May 2010, President Obama visited the Solyndra plant and held out the firm as an example of the future of green energy in America. The president said the company demonstrated that "the promise of clean energy isn't just an article of faith."

Exactly why Solyndra was so dependent on foreign products is not clear. A call to the company on Thursday was sent to a voice recording that stated Solyndra had "ceased operations."

Two Solyndra executives were to testify today before an investigative subcommittee of the House Energy and Commerce Committee. But a press release posted by committee Republicans yesterday said lawyers for Solyndra CEO Brian Harrison and Stover, the CFO, "have now declared that the executives will take the Fifth Amendment and decline to answer questions."

The FBI raided Solyndra's plant headquarters in Fremont, Calif., on Sept. 8, two days after the bankruptcy filing.

Brad Grantz, a spokesman for U.S. Rep. Tim Murphy, R-Upper St. Clair, a member of the House Energy Committee, said the question that Murphy plans on asking Solyndra executives if he gets the chance is: "When can the taxpayers expect to get their money back?"

Several other Republican and Democratic members of Congress could not be reached for comment. Some GOP lawmakers are calling for cuts to loan guarantees for green energy in the wake of the Solyndra bankruptcy.

Benjamin Goldstein, a DOE official, said that private recipients of the department's loan guarantees are not covered by the "Buy American" provisions of the American Recovery and Reinvestment Act of 2009, better known as the fiscal stimulus act.

Two months before Obama's visit to Solyndra, the company put out a prospectus to sell public stock, showing net losses of $232 million for the year ending Jan. 3, 2009, and $172 million for the year ending Jan. 2, 2010.

The company's audit firm, PricewaterhouseCoopers LLC, warned that Solyndra "has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raises substantial doubts about its ability to continue as a going concern."

The initial public offering fell through.

Several foreign firms are listed as creditors in Solyndra's bankruptcy filing. For instance, Cheung Woh Technologies Inc., which has offices in Malaysia, Singapore and China, is listed by Solyndra as being owed $606,000. The company later said the figure was approximately $1.7 million.

Advanced Nano Products of South Korea is listed by Solyndra as being owed $1.35 million. The bankruptcy filing said Connor Manufacturing Services of Oregon is owed $1.4 million. The bills of lading show several shipments of "metal stamping parts" from Connor Manufacturing Services (Asia) and list Singapore as the port from which the parts were shipped.

Another Oregon company, Menlo Logistics Inc., imported material for Solyndra from Singapore, according to bills of lading. Menlo is owed $1.6 million, according to the bankruptcy filing.

 

 
 


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