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Thanks Solyndra
Posted By squarefeet On November 4, 2010 @ 7:11 am In Market Data,Trends | 7 Comments
For taking $550M of our money (in the form of loan guarantees) and using it to expand like crazy when the price of your product is probably going to get cut in half in a matter of a year.
Just seven weeks ago, Solyndra opened Fab 2, a $733 million factory in Fremont, Calif., to make its high-tech solar panels. The new plant was supposed to be the first phase of a rapid expansion of the company.
Instead, Solyndra has decided to shutter the old plant and postpone plans to expand Fab 2, which was built with a $535 million federal loan guarantee.
The company has also announced it will eliminate about 200 jobs. The company leased another 500K SF in 901 Page Avenue in Fremont from Overton Moore, and OM has recently put that up for sale as a leased investment (with about 10 years left for Solyndra).
Considering the fact that pricing for solar will probably fall by half within the next year, and that the company is facing increased competition from manufacturers in China while margins are slipping, any prospective buyer is now looking at the deal and company with much more caution. The challenge for Solyndra is too keep up with the efficiency and cost of its competitors, while balancing huge capital investments in equipment, etc.
Sounds like the hard drive business. And if I’m not mistaken, Fab 1 was a Maxtor hard drive manufacturing facility in its former life.
[via NY Times [2]]
Article printed from Square Feet: http://www.squarefeetblog.com
URL to article: http://www.squarefeetblog.com/commercial-real-estate-blog/2010/11/04/thanks-solyndra/
URLs in this post:
[1] Tweet: https://twitter.com/share
[2] NY Times: http://www.nytimes.com/2010/11/03/business/energy-environment/03solar.html?src=busln
[3] Solyndra Gets a Boost With $535M Govt Loan: http://www.squarefeetblog.com/commercial-real-estate-blog/2009/03/20/solyndra-gets-a-boost-with-535m-govt-loan/
[4] Toyota Announces Decision to Shut Down Fremont NUMMI Plant: http://www.squarefeetblog.com/commercial-real-estate-blog/2009/08/27/toyota-announces-decision-to-shut-down-fremont-nummi-plant/
[5] KLA-Tencor Announces Layoffs; 10% of Workforce: http://www.squarefeetblog.com/commercial-real-estate-blog/2009/03/30/kla-tencor-announces-layoffs-10-of-workforce/
[6] 30% of iStar Financial’s Loans are Non-Performing: http://www.squarefeetblog.com/commercial-real-estate-blog/2009/02/28/30-of-istar-financials-loans-are-non-performing/
[7] Cheaper Rents Bolster Fremont Activity: http://www.squarefeetblog.com/commercial-real-estate-blog/2008/06/03/cheaper-rents-bolster-fremont-activity/
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7 Comments To "Thanks Solyndra"
#1 Comment By Joshua On November 4, 2010 @ 2:47 pm
i wonder what i have to do to qualify for a lil federal grant money.
#2 Comment By squarefeet On November 4, 2010 @ 9:55 pm
Promise to waste it.
#3 Comment By Alex Aguilar On April 21, 2011 @ 9:54 am
The next time I hear somebody wax nostalgic about American manufacturing or whine about how once-great American factories are shuttering their gates and moving overseas I will send them a link to this story.
Politicians can throw federal money at these companies all they want, none of it is going to make any difference in the end. If China can make solar panels cheaper than California, then that’s where solar panels will be made. End of story.
#4 Comment By REIT On July 13, 2011 @ 4:23 pm
josh, if you figure it out, will you let me know?
#5 Comment By Apto On January 10, 2012 @ 8:07 am
Josh, a good first step would be creating a super-pac.
#6 Comment By Gary Seidel On January 17, 2012 @ 8:08 am
This is a tragedy. If you followed solar companies, you knew enough to stay away from them, but this administration threw logic out the window on this misuse of tax dollars.
How many start ups could they have funded with this money? How many real jobs.
Unfortunately this is just the tip of the iceberg in bad investments. Here in our community you have federal dollars rehabbing low income housing at $180,000 per unit, when the units are only worth $50,000 on the market. That and private investors could handle this sector for 1/10 the cost of federal program. We have a weatherization program that fixes up rental properties to the tune of $8,500 per unit, new furnace, new refrigerator, new windows, new insulation….
#7 Comment By Tom Laws On January 30, 2012 @ 2:25 pm
Trillions of private capitol is looking for places to invest. Only the simpletons in government think they are smarter than capitalism.