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Solar company that received $535 million federal loan suspends operations, laying off 1,100
WASHINGTON (AP) ' A California solar-panel manufacturer once touted by President Barack Obama as a beneficiary of his administration's economic policies ' and the recipient of a $535 million federal loan ' is laying off 1,100 workers and filing for bankruptcy.
Solyndra LLC of Fremont, Calif., is the third solar company to seek bankruptcy protection this year. Officials said Wednesday that the global economy as well as unfavorable conditions in the solar industry combined to force the company to suspend its manufacturing operations.
The price for solar panels has tanked in the past year largely because of heavy competition from Chinese firms. The price for solar panels has dropped by about 42 percent this year.
Obama toured the company's facilities last year to highlight the economic benefits of the solar industry and an economic stimulus package that provided seed money for solar startups. At the time, the president said that the new plant being built by Solyndra would employ 1,000 workers.
In a blog posting, Energy Department spokesman Dan Leistikow said that Solyndra was a once promising company that had increased sales revenue by 2,000 percent in the past three years. The loan guarantee was sought by both the Bush and Obama administrations, he said, and private investors put more than $1 billion into Solyndra.
"We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can't stop investing in game-changing technologies that are key to America's leadership in the global economy," Leistikow said.
Brian Harrison, Solynda's president and CEO, said that raising capital became impossible.
"This was an unexpected outcome and is most unfortunate," Harrison said in a statement.
Solyndra had been in the center of a political controversy in recent months. House Republicans subpoenaed documents relating to the loan from the White House Office of Management and Budget.
Another solar company, Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy on Aug. 19. Its CEO said in the filing that it could not compete with solar manufacturers in China, which receive "considerable government and financial support."
Spectrawatt's filing came four days after Evergreen Solar Inc. of Marlboro, Mass., filed for Chapter 11 bankruptcy.
Dearen reported from San Francisco.