Forum Index            

SelectSmart.com®
Before you decide
Over 20,000 selectors

Share

This isn't complicated. 2020 is a referendum on Trump.
Is your name welcomed below? Then you can post here. Otherwise, click "Log In" to post!
Welcome! » Log In » Create A New Profile

solyndra and general motors, the ripoffs that keep on fleecing

Posted by txcup 
solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 12:53AM
[www.coyoteblog.com]


Having sold off its manufacturing plant, fired nearly 1,000 workers and proven the non-viability of its business model, Solyndra's only real assets are what the IRS calls "tax attributes." These are between $875 million and $975 million in net operating losses that can reduce future taxable income, which the IRS values as high as $350 million. Before it went toes up, Solyndra also accumulated $12 million in solar tax credits that can reduce tax liabilities dollar for dollar.

Tax-loss carry-forwards are routine but worthless if a company can't turn profits to pay taxes on. So Solyndra's owners are asking the court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar. A holding corporation will then emerge from Chapter 11 that won't make products or employ workers, but it will get the Solyndra tax offsets.

The dummy company is owned by Argonaut Ventures I LLC, Solyndra's largest shareholder and the primary investment arm of the George Kaiser Family Foundation. Mr. Kaiser is a Tulsa oil billionaire who bundled campaign checks for Mr. Obama in 2008.

Wow, who could have predicted this? Well, lots of folks, including me just over a year ago. I actually underestimated the value, assuming the losses would be worth about $150 million in avoided taxes, not the $350 million the IRS now pegs them at. If I can figure out this game, the Obama Administration had to know what was going on.

If the Administration allows this to happen (and remember that in the GM boondoggle, Obama waived the traditional rules that have bankrupt companies losing their tax loss carryforwards, giving GM a multi-billion dollar tax subsidy almost no one counts in the bailout costs), this will make Kaiser's last cash investment in Solyndra one of the great crony deals of all time.

If you remember, Kaiser (via Argonaut) invested $75 million as Solyndra was going down the tubes. No rational person could have thought that amount would have saved the company, and it didn't. What it bought, we now know, is three things:

•Kaiser got the US Government to give up their lead creditor position to Kaiser, basically putting the US Government behind the Obama donor to get repaid and reducing the taxpayers' influence in the bankruptcy

•It gave Kaiser a few precious months to loot the company. Between that $75 million investment and the bankruptcy, Solyndra sold off most of its liquid assets at a discount to .... Argonaut, the group controlled by Kaiser

•It looks like Kaiser will get nearly a billion dollars in tax losses that can be used to reduce its future taxes by $350 million.

==========================================================================
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 12:57AM
and the latest stimulus errr....cough cough.....corrupt handout from us through obomba gang blows up in spectacular fashion

pony up suckers

[www.thenewamerican.com]

Another day, another subsidized “green energy” firm going bankrupt. This time it’s A123 Systems Inc., a Massachusetts-based manufacturer of batteries for electric cars that received about $500 million in state and federal assistance, including a $249-million grant from the U.S. Department of Energy (DOE).

A123, which has tumbled in value from $2.3 billion to just $11 million, filed for bankruptcy in Delaware on October 16 after missing an interest payment on $143.8 million of debt. The company said it plans to sell its assets to Johnson Controls Inc. of Milwaukee, Wisconsin.

“This action is expected to allow the company to provide for an orderly sale of the automotive business assets and all other assets and business units,” A123 said in a press release.

If the court approves the sale, Johnson will “acquire A123’s automotive business assets, including all of its automotive technology, products and customer contracts; its facilities in Livonia and Romulus [Michigan]; its cathode powder manufacturing facilities in China, and A123’s equity interest in Shanghai Advanced Traction Battery Systems Co., as part of the $125 million deal,” according to the Detroit News.

As The New American recently reported, A123 had announced a deal with Wanxiang Group Corporation that would have seen the Chinese auto parts maker invest up to $465 million in A123 and take control of its operations. That deal, however, fell through “as a result of unanticipated and significant challenges to its completion,” according to A123 CEO David Vieau.

One of those challenges came from Sens. Charles Grassley (R-Iowa) and John Thune (R-S.D.), who last week wrote Vieau to express their concern that taxpayer dollars or the technologies developed with them might end up in the hands of a foreign company.

Like the now-infamous Solyndra, A123 Systems, Inc. was a beneficiary of politicians’ fondness for spending taxpayer dollars on so-called “green energy” projects in defiance of economic reality. In 2007 the company, then just six years old, received a $6-million grant from the Bush administration; two years later it got the $249 million from the Obama DOE, of which it has spent $123 million to date. It also raked in $238 million from Michigan taxpayers. Michigan’s then-Gov. Jennifer Granholm, a Democrat, lobbied the Obama administration for the 2009 federal grant.

“In 2010,” reports the Detroit News, “President Barack Obama invited the CEO of A123 to the Rose Garden to tout the impact of green jobs and he said the company would add more than 3,000 jobs by the end of 2012.”

Obama also called Granholm and A123 employees “to congratulate A123 Systems on this tremendous milestone” (obtaining the DOE grant).

“This is about the birth of an entire new industry in America — an industry that’s going to be central to the next generation of cars,” Obama said.

“For a long time, our economic policies have shortchanged cutting-edge projects like this one and it put us behind the innovation race,” he declared. “And so we're starting to reverse that slide. And anybody who doubts that has to go and see what you guys are achieving…. The work you’re doing will help power the American economy for years to come.”

Obama also thanked Energy Secretary Steven Chu “for his extraordinary work to get the money out the door quickly and wisely.”

Quickly, yes. Wisely, no.

Just as happened with Solyndra, economic reality finally caught up with A123, as Forbes’ Martin LaMonica observes:

Despite having world-class battery technology, A123 Systems suffered from a lack of demand for its electric vehicle batteries. Although the technology has improved and the prices have come down, batteries are an expensive component and mean higher upfront costs for consumers. Sales data [show] that consumers have been showing more interest in plug-in hybrid and hybrid vehicles, over all-electric cars which have a limited driving range.

In addition, A123 had to recall batteries it had produced for a luxury car manufactured by Fisker Automotive, another federally subsidized company, because they failed in the middle of a test drive. That move, notes Bloomberg, “cost A123 $55 million and helped put it on the financial brink.”

The company never created the 3,000 jobs Obama claimed it would; it has only about 1,763 active employees, and some of those were hired before 2009. And, of course, it is hardly driving the economy — at least not in the direction the president had hoped.

A123’s bankruptcy could not come at a much worse time for Obama. He is already under fire from his Republican opponent, Mitt Romney, over earlier green-energy “losers” his administration has bankrolled. To compound Obama’s woes, some of those companies are also making less-than-positive news this week, notes the Wall Street Journal's Tom Gara:

Tomorrow [October 17], bankrupt solar panel maker Solyndra is due to have its reorganization plan evaluated by a court, which may approve it and allow the company to emerge from Chapter 11 as a shell company whose main asset will be large “tax attributes” — losses that can be used to offset future tax payments. Electric car maker Fisker yesterday [October 15] said it had delayed the production of its Atlantic sedan, which was planned to be made at a former GM factory in Delaware.

Add to that the fact that, writes Bloomberg, “top A123 officials have contributed to Democratic political candidates including Obama,” and Romney’s charges of “crony capitalism” in the administration’s green-energy program stand a good chance of sticking.

Romney’s running mate, Rep. Paul Ryan (R-Wis.), has called for the elimination of all green-energy subsidies. Ryan is correct, though not just because the subsidized companies have tended to fail. Even backing winners is unconstitutional.

A Romney administration might end these subsidies, or it might simply dole them out to its own favored companies under pretenses other than green energy. Given that previous Republican administrations have subsidized their pet causes and that Romney’s much-touted experience as the head of Bain Capital was itself an exercise in crony capitalism (according to former Reagan budget director David Stockman), the notion that a Romney administration would do away with all corporate welfare seems highly unlikely

==========================================================================
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 01:00AM
and what' really cool about the ripoff battery maker....

the production of the batteries was outsourced to CHINA

following the general motors model - take money from the public, use to move/setup production overseas

==========================================================================
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 02:23AM
Peanuts in the energy picture, TX. The question you should be asking is not about Solyndra (a company the Red Party was touting back during Bush's term, btw) - the question you should be asking is why are these wingnut websites so obsessed with the pennies we lost on green energy when we give away 100X that amount every single year to oil companies that have been reporting record profits for decades. I'll put it to you... do YOU know why?

Because those websites you're getting your "info" from are created by "activists" who work for the oil industry.
Anonymous User
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 02:59AM
Quote

[T]he loan guarantee program that awarded half a billion dollars in guarantees to Solyndra was supported by President Bush. The program was created on Bush's watch by a law he signed and promoted. The program grew under the Obama administration, which ultimately awarded Solyndra's loan guarantee under a new section of the law created by the stimulus. The Bush administration, though, promoted the loan guarantee program, and Bush himself touted it on his way out of office. There's also evidence his administration specifically prioritized Solyndra's project. [www.politifact.com]

Quote

[W]hen judged by its entire diverse portfolio of investments, the [Department of Energy’s Loan Guarantee Program] has performed remarkably well. Indeed, with a capitalization of just $4 billion, DOE has committed or closed $37.8 billion in loan guarantees for 36 innovative clean energy projects. The Solyndra case represents less than 2% of total loan commitments made by DOE, and will be easily covered by a capitalization of eight to ten times larger than any ultimate losses expected following the bankruptcy proceedings.

Critics who think the government has no place in supporting technology innovation have a tenuous grasp of U.S. economic history. In fact, the government has a long and successful history in helping America’s intrepid entrepreneurs succeed in new high-risk, high-reward technology sectors. As we wrote in “Where Good Technologies Come From,” the government has played a key role, either as an early investor or a demanding customer, in the development of virtually every advanced technology we take for granted today, from aviation to biotechnology, to computers and the Internet, microchips, and now clean energy. Indeed, without a visionary government investing in key strategic industries, world-leading companies like Google, Genentech and Boeing would not exist. [www.forbes.com]
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 03:49AM
So let me get this straight... Forbes, the magazine run by the guy who ran for president as a Republican a few years back, says people like TX have "a tenuous grasp of U.S. economic history."

Yeah, sounds about right.
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 05:44AM
I did this one for you some time ago, tx. Do you never learn?

The amount given to failed startups is a drop in the bucket from the total. Like any massive change in industry and the economy there will always be some who fail.

Solyndra's failure, as I showed you before, was because technological advances left them with an uncompetitive product.

At the Scopes Monkey Trial, Clarence Darrow gave a brilliant speech, but the cynical journalist H.L. Mencken told him "You may as well have shouted it up a waterspout in Outer Mongolia for all the effect it will have on your listeners ..

Ditto here.
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 08:01AM
indy, those facts might matter if obomba campaign $ bundlers weren't lurking around every corner

when the bundlers are feasting on our money while running hopeless failures = no bueno

subsidies are nasty - they destroy productive capacity and enable corruption. best to ban them all -

still waitng for obomba to kick some bp asss

what a joke - a mid level speech reader going to kick one of his master's asses

==========================================================================
Re: solyndra and general motors, the ripoffs that keep on fleecing
October 18, 2012 01:37PM
Idiot!

At the Scopes Monkey Trial, Clarence Darrow gave a brilliant speech, but the cynical journalist H.L. Mencken told him "You may as well have shouted it up a waterspout in Outer Mongolia for all the effect it will have on your listeners ..

Ditto here.
Re: louis vuitton outlet store
November 22, 2012 04:24PM
"Solyndra's failure, as I showed you before, was because technological advances left them with an uncompetitive product."

So that wasn't an issue when our tax dollars were handed out to them? Sounds like the unions should have struck for higher wages to make it work.

Proud member of the .45%
I would rather suffer in good company,
than live comfortably with delicate men.
Non Timebo Mala
Re: louis vuitton outlet store
November 22, 2012 04:34PM
It is, and was, od, always an issue. It is an issue for any business or product where technological possibilities. Heck, it is an issue for digging in the dirt as you, tx and whatsy do. Somebody could develop a better shovel.

However, as I wrote above, and as I detailed in the previous thread, it was a drop in the bucket in what proved to be a highly successful federal programme.

At the Scopes Monkey Trial, Clarence Darrow gave a brilliant speech, but the cynical journalist H.L. Mencken told him "You may as well have shouted it up a waterspout in Outer Mongolia for all the effect it will have on your listeners ..

Ditto here.
Re: louis vuitton outlet store
November 22, 2012 04:37PM
So we should continue to throw away money on the "president's" donors?

Proud member of the .45%
I would rather suffer in good company,
than live comfortably with delicate men.
Non Timebo Mala
Re: louis vuitton outlet store
November 22, 2012 06:49PM
As I wrote earlier, od, it was Bush who first pushed for Solyndra.

I agree, though, that we should not throw money at the President's donors. Any President.

That means an end to subsidizing coal and oil. An end to systems that provide greater profits for the rapacious health care industry.

And, since the Republicans are the prime beneficiary of those donors, it may have the serendipitous consequence of an end to the Republicans - certainly to the Tea Party since that is where there inspiration comes from.

At the Scopes Monkey Trial, Clarence Darrow gave a brilliant speech, but the cynical journalist H.L. Mencken told him "You may as well have shouted it up a waterspout in Outer Mongolia for all the effect it will have on your listeners ..

Ditto here.
Sorry, only registered users may post in this forum.

Click here to login



Cookies Consent Policy & Privacy Statement. All Rights Reserved. SelectSmart® is a registered trademark. | Contact SelectSmart.com | Advertise on SelectSmart.com | This site is for sale!