Showing posts with label Solyndra. Show all posts
Showing posts with label Solyndra. Show all posts
May 29, 2012
Republicans Start to Attack Obama Public Equity Record
I am glad to see that the Republicans have started to attack Pres. Obama's record on public equity investments – tit-for-tat for Democratic attacks on private equity. Karl Rove's American Crossroads group has published an excellent commercial, to which I was going to link. However, the Powerline Blog beat me to it, and also included an advertisement from the Romney campaign on the same subject. Therefore I will link to Powerline.
May 25, 2012
How Does Obama's Public Equity Record Compare to Romney's Venture Capital Record?
Yesterday, two major newspapers published columns looking at President Obama's public equity record in light of his attacks on Gov. Romney's record at Bain Capital. In the Wall Street Journal, Kimberly Strassel published "Vulture capitalism? Try Obama's Version". In the Washington Post, a column by Marc A. Theissen was entitled "Forget Bain – Obama's Public - Equity record is the Real Scandal."
Ms. Strassel suggests "Like Mr. Romney, Mr. Obama has presided over bankruptcies, layoffs, lost pensions, run-ups in debt. Yet unlike Mr. Romney, Mr. Obama's C-suite required billions in taxpayer dollars and subsidies, as well as mandates, regulations, union payoffs and moral hazard. Don't like "vulture" capitalism? Check out the form the president's had on offer these past three years: "crony" capitalism." Ms. Strassel focuses on Solyndra and General Motors, particularly the $82 billion put into the car industry, which seemed primarily designed to protect union pensions.
Mr. Theissen's Article provides a more comprehensive list of the Obama administration's public equity failures – including at least eight major investments in green energy that have become failures. In fact, his column will make a good reference tool for future discussions of Obama's failures. He concludes: "Now the man who made Solyndra a household name says Mitt Romney’s record at Bain Capital “is what this campaign is going to be about.” Good luck with that, Mr. President. If Obama wants to attack Romney’s alleged private equity failures as chief executive of Bain, he’d better be ready to defend his own massive public equity failures as chief executive of the United States."
The irony is that while Obama has been throwing money at uneconomic green energy projects, the entire economics of energy in the United States have been transformed. The development of the Barnett Shale and other major shale developments elsewhere in the country has enormously increased the availability of natural gas, and dropped its price from $12 to $2. Competition between oil and gas is more intense than ever. It is clear that the free market has produced a result far superior to President Obama's attempts to force feed new types of energy sources to us at substantial government expense.
Ms. Strassel suggests "Like Mr. Romney, Mr. Obama has presided over bankruptcies, layoffs, lost pensions, run-ups in debt. Yet unlike Mr. Romney, Mr. Obama's C-suite required billions in taxpayer dollars and subsidies, as well as mandates, regulations, union payoffs and moral hazard. Don't like "vulture" capitalism? Check out the form the president's had on offer these past three years: "crony" capitalism." Ms. Strassel focuses on Solyndra and General Motors, particularly the $82 billion put into the car industry, which seemed primarily designed to protect union pensions.
Mr. Theissen's Article provides a more comprehensive list of the Obama administration's public equity failures – including at least eight major investments in green energy that have become failures. In fact, his column will make a good reference tool for future discussions of Obama's failures. He concludes: "Now the man who made Solyndra a household name says Mitt Romney’s record at Bain Capital “is what this campaign is going to be about.” Good luck with that, Mr. President. If Obama wants to attack Romney’s alleged private equity failures as chief executive of Bain, he’d better be ready to defend his own massive public equity failures as chief executive of the United States."
The irony is that while Obama has been throwing money at uneconomic green energy projects, the entire economics of energy in the United States have been transformed. The development of the Barnett Shale and other major shale developments elsewhere in the country has enormously increased the availability of natural gas, and dropped its price from $12 to $2. Competition between oil and gas is more intense than ever. It is clear that the free market has produced a result far superior to President Obama's attempts to force feed new types of energy sources to us at substantial government expense.
September 16, 2011
Finally, a Clear Explanation on the Solyndra Loan
The Wall Street Journal has an excellent article today explaining exactly what Solyndra made, and what it did with the federal loan of $535 million. The title of the article – – "The Loan Was Solyndra's Undoing" – – does not seem quite accurate. According to the article, Solyndra was in difficulty before the loan, but use the proceeds of the loan to quintuple its manufacturing capacity, This decision drove it over the cliff.
According to the article, Solyndra used a module of cylindrical tubes to manufacture solar power, while other manufacturers use photovoltaic silicon panels. Solyndra's problem was that its process produced much higher costs than the competing system. Solyndra's tubes cost $4.00 per watt of power to produce, while it could only sell each watt for $3.24. At the same time, its Chinese competitors were producing silicon panels at less than a quarter of Solyndra's costs, and today produce panels at $.75 per watt.
Solyndra had a plant with an annual capacity of 110 MW, but actually produced only 65 MW in 2010. However, it used the loan to build a new factory capable of producing 500 MW per year. It could never make use of the additional capacity because it was simply not competitive with the makers of solar panels. At least, the company has some physical assets – the factory – that can be sold in bankruptcy, and the government may ultimately get some of its money back.
The Wall Street Journal has another article today reporting that as recently as May, 2011, the company told the government that it was financially healthy. It also reports the government's excuse for the company's failure – the Department of Energy says that the Chinese suddenly flooded the market with lower cost solar panels. Based on the other article, this appears to be nonsense. Solyndra made a different type of solar product, that was higher cost than the Chinese to start with, and there was no way it could match later price reductions. It's problems were much more fundamental than sudden Chinese competition.
According to the article, Solyndra used a module of cylindrical tubes to manufacture solar power, while other manufacturers use photovoltaic silicon panels. Solyndra's problem was that its process produced much higher costs than the competing system. Solyndra's tubes cost $4.00 per watt of power to produce, while it could only sell each watt for $3.24. At the same time, its Chinese competitors were producing silicon panels at less than a quarter of Solyndra's costs, and today produce panels at $.75 per watt.
Solyndra had a plant with an annual capacity of 110 MW, but actually produced only 65 MW in 2010. However, it used the loan to build a new factory capable of producing 500 MW per year. It could never make use of the additional capacity because it was simply not competitive with the makers of solar panels. At least, the company has some physical assets – the factory – that can be sold in bankruptcy, and the government may ultimately get some of its money back.
The Wall Street Journal has another article today reporting that as recently as May, 2011, the company told the government that it was financially healthy. It also reports the government's excuse for the company's failure – the Department of Energy says that the Chinese suddenly flooded the market with lower cost solar panels. Based on the other article, this appears to be nonsense. Solyndra made a different type of solar product, that was higher cost than the Chinese to start with, and there was no way it could match later price reductions. It's problems were much more fundamental than sudden Chinese competition.
Subscribe to:
Posts (Atom)
Posts
