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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 ]
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/
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 NY Times: http://www.nytimes.com/2010/11/03/business/energy-environment/03solar.html?src=busln
 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/
 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/
 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/
 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/
 Cheaper Rents Bolster Fremont Activity: http://www.squarefeetblog.com/commercial-real-estate-blog/2008/06/03/cheaper-rents-bolster-fremont-activity/