Over this week, I've studied the whole Solyndra business failure....which is gripping the media and the administration
There are four simple failures built into this deal which a banker would freak out on and ask huge questions before loaning out money.
First, while they had a great concept....they needed exceptional engineers and developmental personnel. The best of the best. Sadly, you only find these guys out in southern California, which has high taxes, high costs of employment, and high property taxes. When they went from development to production....they built the plant right there in southern California and continued on. In my humble opinion, they wasted twenty-five percent of their cost. If they'd gone to Mississippi or Alabama....it could have been done for less.
Second, once in the production stage....they had issues in producing 100 percent quality. They had a very delicate procedure and they were having a small number of solar panels coming off the line each day which were failures. They never could crack the case of these failed production items. These added more to the cost of production.
Third, some idiot came up with the idea of distributors throughout the US selling these. So they acted as middle-men. You have to give them a cut on the deal....so you lost more money. They've admitted in public that they were making the items and actually selling them at a loss, just to get started up. You'd have to be a total idiot to think that makes good business sense.
Fourth and final, most folks readily agreed that once they got the $500 million loan from the government....that really spooked the business world capitalist guys. Most folks agree that once the government loan happened, it really ended the rest of the possible options.
So here's the funny thing. They are going toward bankruptcy with a great idea in their hands. The judge will put everything up for an auction and sell. There are patients here....very strategic and significant patients. You can imagine the auction where two Chinese guys show up and buy most of what's left of the plant and the patients....and just walk away gleefully smiling.
The White House? I suspect they really didn't know much about business and their inside guy who was all doped up on green jobs....just bought this hook, line and sinker. Does it hurt the President? I suspect that when the smoke clears on this deal.....250k voters who might have voted for the President across the US....will not vote for him because of Solyndra. It's not a huge deal....but it makes the experts in the White House look idiots.
My humble advice to any future administration.....when some company or start-up wants to meet with you about loans for their business....just smile and hand them a pen. Don't give them cash or a loan. If they've got a great idea....they will find bankers who believe in it.