Solyndra Essay: California based solar panel manufacturer

Legal and Ethical Issues Surrounding Solyndra Institution Date Name Abstract The collapse of an organization that has been fronted as having a good model often raises a lot of questions. Solyndra is one such organization that went down in the years of the recent economic downturn, despite a lot of money having been pumped into it by both the government and private investors. In this paper, we interrogate what might have gone wrong in the whole issue surround the fall of the organization, more so some of the ethical and legal issues that might have been raised as far as market analysis is concerned. Introduction In today’s challenging economic times, organizations are being affected by several internal and external factors that may sometimes be unseen until they strike hard on some operational system within the organization. Increasing commodity prices and fluctuating markets are some of the immediate factors that may contribute to the fall of an organization. The case of Solyndra is not far from these factors. In this case, at one time or the other in the process of business development, the organization is likely to face immense challenges that may shake up the way business is done and greatly affect its operations. This happened to the renowned Californian manufacturer of cylindrical solar HYPERLINK "http://en.wikipedia.org/wiki/Solar_panel" \o "Solar panel"panels, Solyndra in September 2011.The company had cut a niche for itself as a provider for high-tech solar panels that had been widely used over several countries and were increasingly gaining popularity. Background Dr. Christian Gronet founded Solyndra in 2005. Its offices came later in 2006 headquartered in Fremont, California. Actual production began in 2007, and there was a relatively speedy growth given that by 2008, Solyndra the company set in Germany. This year also saw their first shipment of commercial solar panel. It was a promising season for Solyndra and by 2009; the company hit the $100 million dollar revenue mark and had the largest single installation in the U.S. In this year still, they received a $535 million stimulus package loan from the Department of Energy that was meant for continued construction. It was meant to boost its activities a great deal and it elicited varied reactions even prompting factory visits by top government officials. Unfortunately, this also marked the beginning of its overall problems. Solyndra’s products were manufactured at a $733 million state-of-the-art plant in Fremont, California. This plant is the one for which the company had received a $535 million federal loan. At the same time, investment by private investors was estimated at $198 million. In addition, the company was expected to have a production capacity of 610 megawatts by 2013. These developments were associated with market conditions whereby low cost solar panels more so from China had seen Solyndra’s sales start to plummet. This raised many questions as to how a company that had acquired millions in stimulus loan can so rapidly fall into bankruptcy. The begging question was: What laws if any were broken and what exactly went wrong? These are some of the issues we may try to fathom in this discussion Discussion One of the unique qualities that seem to have endeared the company to the general public and to specific consumers is its hi-tech photovoltaic (PV) panels. They could perform superbly by applying a few mounting techniques such as horizontal placement and packing them really close. This could ensure that most of the available roof –top could be covered significantly to enhance maximum production of electricity per roof top than conventional panels could do (Baker, David 2011). Plainly put, the company intended to introduce and had actually introduced a product that was like no other as far as solar /green energy is concerned. Consider, for instance, that their panels were made of cylindrical tubes while the conventional solar panels are flat. The effect of this cylindrical tube was that it could absorb energy from any direction. Such technology seemed timely considering that consumers are looking for simplified technology with optimum output. While Solyndra was able to offer this, perhaps it was rightly be said that other market factors were not considered, and inconsistency in prices of production materials formed part of the problems of the company as later analysis revealed. Ethical and Legal Issues A number of issues come into perspective when looking at the whole bankruptcy issue of the company. Perhaps the best point from which this matter may be approached is looking at its duration of operation. It is agreeable that an undertaking so heavily invested in, going down in a period of about six years raises more questions than answers. The idea of the company is initially seen to have put every investor in high spirits. However, there seems to have been several aspects of the business that only became visible too late. International competition is undoubtedly one of these factors. The unforgiving question nonetheless is how the federal government could have failed to foresee the dwindling financial status of the company. Before issuing the loan, there was enough evidence that the company was not doing very well. For instance, a 2010 report by Energy and Commerce Committee showed that Solyndra had never reported a profit since its inception. It also reported that Solyndra was experiencing negative cash flows. The company had also reportedly cancelled a $300 million initial public stock offering. The ethical questions that come into focus is whether a responsible body failed to do a thorough research as to the financial status of the company (Washington Post, 2011). At this point, the House Energy and Commerce Committee pointed out that the Department of Energy (DOE) is seen to have failed to adequately monitor Solyndra’s financial condition. This could be termed as laxity by a government body to thoroughly execute its mandate. It has to be borne in mind that this was the department directly responsible for issuing the loan. When Republican members raised questions about these issues particularly by the House Energy and Commerce Committee, Solyndra is said to have attempted to mislead the committee by producing a document in July of 2011(HYPERLINK "http://archives.republicans.energycommerce.house.gov/Media/file/Hearings/Oversight/092311/SolyndraBackground06232011PDF.PDF"Exceeding Expectations: Solyndra Today) that claimed the company’s financial condition was improving. These pointed out to a possibility that a group of individuals within the organization and most likely even within the DOE was colluding for personal gain. This digs into the moral fabric of concerned persons since it is evident that there was essential information to diverge that largely remained unearthed. Consider for instance the fact that in March 2009, an administration Office of Management and Budget (OMB) employee wrote in an HYPERLINK "http://archives.republicans.energycommerce.house.gov/Media/file/Hearings/Oversight/091411/DocumentsEnteredIntoRecor...