Dr. Chris Granet and the Founding of Solyndra
Dr. Chris Granet founded a startup renewable energy company in Fremont, California in 2005. This firm, now known as Solyndra, specializes in the production of tubular solar tubular panels. The company's offering was unrivaled by any other product on the market in the solar industry marketplace, since all solar manufacturers sell outdated flat panels (Leber, 2012).
The Efficiency of Solyndra Photovoltaic Solar System
According to Leber (2012), the Solyndra photovoltaic (PV) solar system did not need to be anchored down or strategically positioned like other conventional solar panels that used ballast for anchorage. This had a significant impact on the solar panels on efficiency to absorb, from the sun, light energy (Leber, 2012).
Government Support and Funding for Solyndra
The company was awarded by the US Energy Department with a huge loan grand in the year 2009 (Federal Information & News Dispatch, 2012). Additionally, the company received 0.5 billion dollars in addition to a tax break, totaling up to the $25.1 million, from the California’s Alternative Energy & Advance Transportation Authority (CAEATA) (Global News Stream, 2011). The primary intent of this huge amount of cash transfer was to enable the build-up of a new manufacturing plant since it was projected that the demand for the new solar panels would be extremely large.
Solyndra's Bankruptcy and its Causes
Solyndra’s corporation woes started off in the year 2011 in the month of August when it filled for the chapter 11 bankruptcy. Whereas it is reasonable to state that the loans received by this company were quite huge, their lending was in accordance with the energy law enacted in 2005 which gave power to the Department of Energy to lend federally backed loans for any projects deemed innovative and which would aid in the reduction of air pollution. By this time, the company had become defunct, and the manufacturing and production halted in addition to a majority of the employees being laid off. Amongst the reasons given by the company for the closure included plummeting of the solar panel prices due to competition from the Chinese manufacturers and also the cost of production was said to be getting extremely expensive. The last nail in the company’s coffin was hammered when the administration could not come to an agreement on the injection of supplementary capital leaving it without a single cent to run its operations (Global News Stream, 2011).
Introduction
As earlier mentioned, the federal government of the United States had taken a bold step to give a huge mortgage to the auspicious, but a dubious firm. Considering that the statute of that time provided such a chance, the company received a large sum of money for the advancement of its manufacturing. In any case, the present day situation shows that there is still the existence of flagrant injustices and still frictions, even with the promise of unlimited growth that makes the component distributive. In the first document on Ethics of Solar Panel developed by UNESCO considers that in the current situations it is critical to institute a modicum of justice in the distribution of the Solar Panel and the economic resources. As it was the intent of the government, this loans should have been an example of concern for the environmental safety and a judicious funding of advanced technology in this perspective. The collapse of the Solyndra Company turned out to the reason behind the multiple grievances addressed to the Federal government of America and a critique to the good intentions. Nonetheless, it is unreasonable for one not to object to the statement that the funding was an out of bound step that led to the loss and wastage of an enormous amount of taxpayer’s money.
Legal and Ethical Concerns Surrounding the Solyndra Corporation
The enterprise was subjected to investigations, within a few weeks after and before filing for bankruptcy, by the criminal investigation overseen by the United States Attorney’s office & Department of Justice. In addition to this, there existed numerous ethical and legal issues that ascertained in the Solyndra Corporation. A worthy is shown in point of serious mistakes in the management planning for the reasons that the situation was associated with insolvency, something that would possibly have been resolved better. The inquest took ten weeks, and few ethical and legal questions could have been answered including: did the management lead the company to bankruptcy intentionally; why did the company with such a perspective fail to cope up with the difficulties barely two years after the transfer of the loan by the United States Energy Department? More so, there subsisted two explicit legislature acts that were specifically applicable to this case and the ethical codes that should have also been utilized.
Legal issues
The case put forth by the company had a very complex legal background. The legal issues that needed to be solved were whether Solyndra’s Corporation and those who were in charge of it did misrepresent the actual situation or rather state of its financial health or there were accounting malpractices. There existed a hoard of multiple other legal issues that the House Committee, particularly the Republican Party, raised. One such concern is the snub by Solyndra’s management to disclose the customer contracts reason being that the firm was in the progression of engaging a trustee to take over the flagging energy entity (Leonnig, 2015). Furthermore, it was touted as breaking or rather going against the energy law of 2005 when the DOB ruled that the private investors were to be given their reserves back afore the tax payers if Solyndra Company went belly up (Global News Stream, 2011).
Employees Lawsuit Against Solyndra
Employees who were laid off by the enterprise sued the company and requested for compensation relying their argument on the fact that the firm failed to take acknowledge and take heed the Workers Adjustment & Retraining Notification (WARN) act. The WARN act compels the company to forewarn its employees within 60 days before sacking them and also pay them for this time frame (Global News Stream, 2011). The employees filed a law suit with an objective that the courts will order the company to seek the payment of the sixty days pay, in addition to 401(k) contributions and health care benefits for the one thousand one hundred workers who were discharged of their duties minus the severance pay (Global News Stream, 2011).
Ethical Concerns and Influential Figures
Goerge Kaiser, one of the biggest investors in the Solyndra Enterprise, was amongst the financiers of the Obama presidential campaigns. This raised an ethical issue for the reasons that it was believed that Kaiser had a hand in influencing the hasty release of the half a billion mortgage devoid of observing due diligence (Federal Information & News Dispatch, 2012). More revelations that substantiated the ethical issue was the accusation raised against the energy department for having requested Solyndra’s company management board to shun from laying off up to the aftermath of the 2010 primary elections (Federal Information & News Dispatch, 2012). The company also denied having any financial woes despite knowing that it was actually in crisis and this is also an indication of ethical failure on the respective departments.
Applicable Laws and Ethical Code
In the Solyndra Company case, there were some of the laws which were ignored. One of this laws is the 2005’s Energy Act which stated overtly that the Department of Energy (DOE) should consult or rather turn to the Secretary of Treasury and OMB afore their final decision of allowing any deviation in the credit or mortgage (Federal Information & News Dispatch, 2012). The choice of the Department of Energy to award private investors their dues did not succeed from any consultations with either the Secretary of Treasury or the OMB (Federal Information & News Dispatch, 2012). Tax evasion was the second law usurped by the solar company since by filing for the bankruptcy; Solyndra firm was able to retain the huge amounts of money on the net operating losses that would be used within the organization (Hasl-Kelchner, 2006).
Solyndra Company abused the ethical code of honesty when it declined to inform the Department of Energy on the status of its financial woes (Federal Information & News Dispatch, 2012). There is sufficient proof that the firm was in financial crisis before it even got the restructured loan. According to Global News Stream (2011), George Kaiser, one of its chief financiers who also happened to be President Obama’s prominent fundraiser, had offered the company seventy-five million US dollars to enable it to reposition in the enhanced state in February exactly at the time the federal government was in the process of refining it.
Ethical Framework
One of the ethical frameworks that apply to the Solyndra corporation case is one that forbids the government to engage with particular industries, specifically the start-up companies, as a venture for the capitalist (Hasl-Kelchner, 2006). In matters of energy business, it is the responsibility of the government to create an ethical framework that takes into account or rather levels the playing field for all stakeholders and players entangled in it, that is both the renewable energy and fossil fuel fired start-ups (Wheeler, 2015). In this regard, the government is not only answerable for the adverse effects that come from its activities but also regulating them equitably be it misuse of grants or contribution to global warming for green energy projects. Rather wasting taxpayers’ money in funding dubious entities, the government can achieve its intents with regard to environmental conservation by enacting carbon tax, or a cap and trade, policies (Wheeler, 2015).
Application of the Philosophy of Milton Friedman to This Situation
Milton fried man is one of the most celebrated economists of the 20th century (Macleod, 2007). Milton is known for actively advocating for free markets which are unencumbered by any government meddling. He supported his argument by claiming that markets would flourish if they are excused from government regulations drawing a distinction between the state and the market in his television show ‘free to choose’ (Mangu-Ward, 2007). He furthered his argument through the use of simple language in order to relay the significance of unregulated markets with a liberation line that was followed by a majority of the countries evidenced by the privatization of most of the state corporations (Macleod, 2007).
Solyndra corporation case is directly related to the theory of Professor Milton Friedman. It is clear that if the federal government had left this Solyndra Energy Corporation to carry on with its own devices and allow the market experts to take on the speculations such as venture capitalists, then everything that transpired in the course of the firm’s closure in addition to the loss of half a billion public funds would not have transpired.
Impact on Solyndra Executives
In relation to the bankruptcy case’ ethical and legal proceedings, a majority of the Solyndra company executives pleaded the fifth when the House committee was interrogating them. In the recent years, some of the senior employees attached to the Solyndra Energy firm worn an action suit that saw $370, 000 bonuses repatriated to them after the full liquidation of this firm is achieved (Global News Stream, 2011). A larger percentage of those who invested in Solyndra Company agree that it was not for the government interference in the running of the Silicon Valley energy corporation; the company would have been able to weather the storms that it was going through at that moment (Global News Stream, 2011).
References
Federal Information & News Dispatch (2012). Documents suggest DOE secretary chu personally championed $1.4 billion loan guarantee for prologis as Solyndra was rapidly failing. Congressional Documents and Publications: Lanham. Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/922400394?accountid=8289
Federal Information & News Dispatch (2012). Evidence shows DOE ignored repeated warnings that solyndra deal was unlawful. ProQuest Central. Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/898543861?accountid=8289
Global News Stream (2011). Accountability for Solyndra mess. The St. Petersburg Times (St. Petersburg, FL)
Hasl-Kelchner, H. (2006). Business guide to legal literacy: What every manager should know about the law. Place of publication not identified: John Wiley and Sons.
Leber, J. (2012). A solar startup that isn’t afraid of solyndra’s ghost: Braving comparisons to the bankrupt solyndra, SoloPower is moving ahead with the production of thin-film solar panels. Technology Review, Inc.
Leonnig, C. D. (2015). Top leaders of Solyndra solar panel Company repeatedly misled federal officials, investigation finds. Washington: WP Company LLC d/b/a the Washington Post.
Macleod, A. M. (2007). Invisible hand arguments: Milton Friedman and Adam smith. Journal of Scottish Philosophy, 5(2), 103-117. doi:10.3366/jsp.2007.5.2.103.
Mangu-Ward, K. (2007). The Milton Friedman show. Los Angeles: Reason Foundation.
Wheeler, A. M. (2015). The counselor and the law: A guide to legal and ethical practice (7th ed.). US: John Wiley & Sons Inc.
