Yet another solar company that received loan guarantees from the Department of Energy has dismissed factory workers, lopping off 70 percent of its U.S. employees. Loveland, Colo.-based Abound Solar announced Tuesday it would lay off 280 workers at its production plant near Longmont, leaving 120 still employed. The start-up (2009) company attributed the cutbacks to the need for upgrades at the plant to manufacture more efficient solar panels, with plans to restore production levels and rehire most employees within six to nine months.
“Hopefully at the end of that time period we will bring people back,” said Steve Abely, Abound’s Chief Financial Officer, to the Boulder Daily Camera.
DOE’s $400-million loan guarantee to Abound closed in December 2010, after President Obama delivered a weekly message a few months earlier hyping his jobs plan in a “clean energy economy,” in which he cited his plans for Abound:
Energy Secretary Steven Chu was equally boastful about the Abound loan.
“Pioneering projects like this are what will help the U.S. recapture the lead when it comes to supporting innovation in the global clean energy economy,” he said. “Not only is this investment creating thousands of jobs, but it is also increasing our renewable energy manufacturing capacity and putting us on the path for our future prosperity.”
News Web site The Complete Colorado revealed “fingerprints” of a “pay-to-play agenda” when Abound received its conditional approval in September 2010. Wealthy philanthropist Pat Stryker, whose Bohemian Companies has significant investment in Abound, donated $475,599 to federal Democrat candidates and causes over the 2008 to 2012 election cycles, according to the Center for Responsive Politics. Included in that amount is $11,900 in maximum contributions to President Obama’s two campaigns for the White House. Stryker also was an $87,500 bundler for the president’s Inaugural Committee, the People’s Press Collective discovered, anddonated $50,000 herself. The Sunlight Foundation reported that she gave $35,800 to the 2012 Obama Victory Fund. In October 2009 Stryker also visited a former assistant to the deputy chief of staff at the White House, Kristin Sheehy, who also hosted several visits from SEIU president Andy Stern. The purpose of Stryker’s visits is undisclosed.
Stryker is known to have contributed millions of dollars to Democrat candidates for state and federal office in her lifetime. Among those are gifts to former U.S. Rep. Betsy Markey, whose district includes the Abound facility – $9,400 made up of max contributions for her 2008 and 2010 successful runs for office. Abound helped pay for ads in 2009 that thanked Markey for voting for the cap-and-trade bill that passed the House that year, which would have benefited renewable energy companies. And according to the Fort Collins Coloradoan, Markey also pushed for approval of the loan guarantee for Abound.
“Without the loan guarantees, they would not be able to really move forward on this project,” Markey told the newspaper. “It’s seed money that’s going to be fully paid back by Abound.”
Green energy Web site Gigaom.com reported Tuesday that Abound has drawn down only $70 million of its DOE loan, and noted that a manufacturer shouldn’t have to shut down to the degree Abound is to upgrade its equipment. “Abound conceded this point somewhat when it noted in its press release that the ‘current market conditions are challenging for all U.S. solar manufacturers,’” the Web site reported.
There may be other complications for Abound to survive, much less pay back taxpayers the money they are owed. The commissioners of Weld County, where Abound’s facility is located, suspended nearly $100,000 in property tax incentives for the company. According to the Independence Institute, “when it came up for renewal in December for the 2012 budget, commissioners decided to save the taxpayers that money instead.” One commissioner wasn’t convinced that Abound was creating jobs for county residents, but another commissioner defended Abound as the “anti-Solyndra,” despite its lack of profitability after four years in business.
Abound has also lost top executives in recent months to seemingly lesser renewable energy companies, and is on its third CEO. But its recent woes didn’t stop the company from making a sudden foray into K Street influence peddling, spending $70,000 in the 4th quarter last year to lobby the House, Senate and Department of Energy solely about the Loan Guarantee program. Was it an emergency effort to preserve its access to the unused portion of its award?
So far Abound has escaped the fate that has befallen Fisker Automotive, which had its $529 million DOE loan halted at a $193 million drawdown after failing to reach milestones in delivering its Karma model. Thatelectric vehicle company, backed bywealthy venture capitalists ( including Al Gore) that contributed big dollars to President Obama and Democrats, was also granted favor when DOE awarded loans in 2009 and 2010. AndSmith Electric Vehicles, which manufactures delivery trucks, was given $32 million in grants to help it buy out its failing parent company in the United Kingdom. Even Nissan CEO Carlos Ghosn has said, in essence, that the only reason he’s in the electric vehicle business is for the government subsidies. Nissan received $1.45 billion in loans from DOE to retrofit a plant in Tennessee to build the electric Leaf.
Between the loan programs and stimulus grants, DOE is compiling a lousy track record of placing “bets” on “clean” energy for President Obama. Battery maker Ener1 has filed bankruptcy, and another, A123 Systems, canned 125 factory workers in November but recently gave its top executives big raises and improved parachutes should the company change hands. Beacon Power, recipient of $39.1 million in DOE loans , also went bankrupt. And then there are the solar companies: bankrupt Solyndra, of course, which cost taxpayers at least $535 million and cost 1,100 people their jobs, andFirst Solar, which recently let go 100 employees despite billions of dollars in grants and loan guarantees from the U.S. government.
But it’s just another day at the office for DOE and the affluent who skim billions of dollars from taxpayers for alternative energy schemes that can’t survive without government mandates and subsidies. As David Wells, a partner in green technology investment firm Kleiner Perkins, said recently, “It’s the nature of these high-risk, high-reward things that most of them will fail. But one or two will succeed.”
Comforting, isn’t it?
