The Rise and Fall of Solyndra Research Paper Example | Topics and Well Written Essays - 2000 words

The Rise and Fall of Solyndra - Research Paper Example A firm uses its particular strengths to compete in the marketplace while seeking to minimize the effect of its weaknesses. The case of Solyndra, the solar panel manufacturer, is unique because it was the only company in the solar panel manufacturing industry of the USA that relied on silicon based technology. The Formation of Solyndra Solyndra was founded in 2005 by Dr. Christian Gronet and had its headquarters in Fremont, California. The company manufactured cylindrical panels of CIGS (copper-indium-gallium-diselenide) based thin film solar cells which, as it was believed, represented a superior technology having certain advantages over conventionally produced solar cells. Thus, the company hoped to have created its own niche within the industry. The sales revenues for 2009 and 2010 were $100 million and $140 million respectively, before a peculiar set of circumstances forced the company to file for bankruptcy under Chapter 11 in 2011. The company claimed to have set up 1000 systems all around the world (The Solyndra Website, 2011). The Emergence of Legal and Other Issues Solyndra has been a company that was touted to be a success story exemplifying the usefulness of the Obama Administration’s green energy plan for the nation. The founder of the company was replaced by Bernie Harrison, an Intel veteran as CEO in September 2009. The company resorted to lobbying and had contributed a sizeable sum to the Obama campaign. Small wonder then- that out of 143 companies applying for a Federal loan, Solyndra was the first to receive a sum of $527 million from the Federal Financing Bank, under conditional guarantee from the US Department of Energy. By that time, it had already spent about $1.8 million lobbying for this cause. Further investigations have revealed that due to Chinese solar panels flooding the US markets, the company had been unable to compete effectively and had been forced to sell many of its products at below the cost of production. Moreover, as t he cost of silicon plummeted in the world market, it became more and more difficult to make a profit. It appeared that the company had chosen the wrong silicon based technology to make its products and was now bearing the brunt of this mistake. Controversies Surrounding the Company Ethical considerations notwithstanding, one might have expected that the loan from the Obama Administration would be used to correct an already worsening situation and that the company would try to claw its way of the abyss it had fallen into. Sadly, this was never the case. Investigations by the FBI and newspaper reports by the Washington Post and others have revealed that company executives and top management went on a spending spree following the approval of the loan. However, weakening demand in the light of competition from Chinese firms such as Yingli and Suntech was cited as a worry. Solyndra’s new plant was built from the proceeds of the loan and another $198 million from private investors. At the time of taking the loan, the company had promised to create at least 3000 jobs in the construction and solar manufacturing industries, of which 1000 would be US based. But it all came to nothing and Solyndra was forced to file for bankruptcy