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Entries in Federal Loan (2)

Thursday
Mar012012

Solar Firm That Got $400M Federal Loan Cuts Workforce in Half

Abound Solar(NEW YORK) -- Another recipient of Energy Department loan funds has run into financial trouble.

Colorado-based Abound Solar announced this week it has been forced to lay off 180 of its 400 workers as it tries to retool to produce a more efficient type of solar panel in order to keep a technological edge on Chinese manufacturers who are flooding the market with less expensive models.  Abound received approval in 2010 for a $400 million government loan.

"As you know the solar market has been extremely difficult for all manufacturers," said Craig Witsoe, the CEO of Abound Solar, in an interview with ABC News on Wednesday.  "To continue to make the panel we make today, to have to sell it below cost, it's a tough environment to operate in."

It is one of four companies that have been issued a combined $1.3 billion in loans by the Obama administration to operate in the highly competitive field of solar manufacturing.  Solyndra, the best-known of those recipients, filed for bankruptcy last year, touching off a wave of controversy about the role of government money in backing high-risk start-up firms in the alternative energy field, and an investigation by Republicans on the House Energy and Commerce Committee.

Energy Department officials noted Wednesday that the federal loan to Abound had Republican support, including an $11.8 million tax credit from an Indiana economic development board chaired by Republican Gov. Mitch Daniels.

"We will continue to work with Abound as we do with all of our loan recipients as it works through these issues," said Damien LaVera, a DOE spokesman.  "While the challenges facing solar manufacturers have been widely reported, we continue to believe that supporting innovative companies like this is important to ensuring our nation has the ability to compete for the clean energy jobs of tomorrow."

The Energy Department loans cut across a range of "green" technologies, and several of the recipients have been exhibiting signs of distress in recent weeks.  Earlier this month, electric car start-up Fisker Automotive announced it was being forced to halt production at its Delaware facility and lay off several dozen workers.  In November, the company developing batteries for Fisker announced the temporary layoff of 125 employees.  A123 Systems had received a $249 million Department of Energy stimulus grant.

Witsoe said the solar manufacturing sector has been especially hard-hit because of stiff competition from Chinese companies, which he says have selling below cost and dumping solar panels on the American market.

"We fully support global competition as long as it's fair," Witsoe told ABC News.  "It's a company like us versus a country.  China plays very hard."

In order to compete, Witsoe said Abound is retooling its manufacturing facilities to bring to market a more advanced, more efficient solar product that will keep the company ahead of its foreign competitors.  But while that work is being done, he said, the company could not maintain the size of its workforce and had to make the painful job cuts.

The company maintains its goal of producing its unique brand of solar panels for commercial customers at facilities in Colorado and Indiana.  It has drawn down $70 million so far from a $400 million federal loan and has been in discussions with the Department of Energy about revising the terms of its loan to insure it continues to have access to the federal funds.

"The jobs will definitely come back," Witsoe said.  "When we rescale with the new product, we will need to hire back likely as many people as we had.  We know this is a really difficult thing.  We hate to have any job loss in the company. But it was the right decision for the business."

Back in October, President Obama responded to questions about the risk assumed by his administration when it decided to back green energy start-up ventures with taxpayers' money.  He stood behind the decision, saying it was important for the government to support the push into alternative forms of energy, and the program had the potential to pay dividends in the form of thousands of new jobs.

"There were going to be some companies that did not work out," Obama told reporters.  "All I can say is the Department of Energy made these decisions based on their best judgments." 

Copyright 2012 ABC News Radio

Thursday
Oct062011

Obama: Solyndra Got Loan 'On the Merits'

Ken James/Bloomberg via Getty Images(WASHINGTON) -- President Obama said Thursday that his administration has loaned billions to startup high-tech firms like the now-bankrupt solar firm Solyndra based not on political influence, but "on the merits."

"I have confidence decisions were made based upon what's good for the American people," Obama said in a press conference Thursday in response to questions from ABC News senior White House correspondent Jake Tapper. "There were going to be some companies that did not work out. Solyndra was one of them."

The president addressed multiple questions Thursday about Solyndra, the first recipient of a government loan under a program to help finance startup companies in the fledgling field of green energy. Solyndra declared bankruptcy last month, locking out 1,100 workers. The Energy Department loan is now the focus of investigations by Congress and the Department of Justice.

"All I can say is the Department of Energy made these decisions based on their best judgments," Obama said, defending the decision to make Solyndra the country's first loan guarantee recipient.

The press conference came as sources inside the White House were being more specific about what took place when billionaire oil magnate George Kaiser visited 1600 Pennsylvania Avenue to talk with top Obama aides.

Kaiser, a major donor to Obama's campaign and a chief investor in the California solar panel manufacturer Solyndra, did not attempt to cajole the White House into giving the company a $535 million federal loan, a White House official told ABC News.

White House officials initially said they thought the meetings covered Kaiser's charity work. A new review of visitor logs by the Sunlight Foundation showed that Kaiser was accompanied by experts on energy policy to at least three of the meetings. On Wednesday, a White House official familiar with an internal review of meetings between Kaiser and such senior presidential aides as Valerie Jarrett and Pete Rouse told ABC News that the White House now firmly believes that Kaiser never broached the subject of the Solyndra loan.

Kaiser has "said publically that Solyndra was not discussed at these meetings, and we have no reason to dispute that," the White House official said, speaking on the condition of anonymity because he had not been given approval to discuss the matter. "We understand that the conversations in these meetings were focused on the general policy priorities of the George Kaiser Family Foundation, including early childhood education and poverty, health care policy and energy policy."

Questions about Kaiser's 16 White House visits -- including four that occurred in the days and weeks before the Energy Department approved Solyndra's loan -- have been the focus of significant attention since Solyndra declared bankruptcy. House Republicans in particular have been trying to determine whether political influence played any role in the selection of Solyndra in 2009 to become the first loan recipient under President Obama's plan to provide a boost to the fledgling "green energy" industry.

Kaiser is one of several Obama campaign supporters who had a stake in companies that later received federal loans, and his presence in the White House during the days before Solyndra's loan won conditional approval provoked speculation among some Republicans that politics had influenced the loan decision.

Senior administration officials have vociferously denied this charge, saying career employees inside the Department of Energy evaluated the loan on its merits, free from political meddling. But the chairman of the House subcommittee that is overseeing an investigation into the Solyndra matter wrote to the White House Counsel Wednesday seeking more documents on the subject. The letter specifically notes that Obama fundraisers and senior White House aides appeared to be engaged in discussions about Solyndra.

"Nearly eight months into our investigation, documents provided to the Committee last Friday confirm those closest to the President -- top advisors like Valerie Jarrett, Larry Summers, and Ron Klain -- had direct involvement in the Solyndra mess," said Rep. Cliff Stearns, R-Fla. "In addition to the cast of West Wing characters with access to the Oval Office, documents reveal a startlingly cozy relationship between wealthy donors and the President's confidantes, especially in matters related to Solyndra."

The latest statement from the White House came, in part, in response to a new report from the non-partisan group The Sunlight Foundation. The foundation reported on its blog this week that a closer inspection of White House visitor logs found three instances in which Kaiser visited the White House with former Alaska Gov. Anthony Knowles. Knowles now serves as president of the Kaiser-funded National Energy Policy Institute, whose goal is "to move beyond total oil dependence and to supplant consumption of imported oil through increased domestic energy supply, reduced foreign oil and gas demand and lower carbon emissions to include enhancement of traditional sources of domestic oil, gas and coal."

"We did not advocate any specific policies or portfolio of policies," Knowles told the Sunlight Foundation in response to questions about the White House meetings.

Copyright 2011 ABC News Radio







ABC News Radio