Solyndra Solar Panel Manufacturers

SolyndraSolar Panel Manufacturers

InstitutionAffiliation

SolyndraSolar Panel Manufacturers

SolyndraSolar Manufacturing Company had a steep financial problem in late2010 that made the company violate terms of its loan-guaranteeagreement. The loan agreement was between Solyndra and the Departmentof Energy and that technically defaulted on its $535 million loan.Solyndra Company started in 2005 in the country of California by oneDr. Chris Granet (Platzer, 2012). It is a company that recognized forthe manufacture of solar panels that are tubular that was sellingmore than any other company producing solar products in the market.The advantage that Solyndra Company had other the other enterprisesthat produced the traditional flat solar panels was that it createdphotovoltaic (PV) solar system. The photovoltaic panel did not need aconcrete placing for usage, but it could work much easier than thetraditional solar system. Photovoltaic was much efficient than othersolar panel products that were on the market (Platzer, 2012).

SolyndraCompany started experiencing financial difficulties on 31st August2011. The problems came in when the company filed for the Chapter 11of bankruptcy. It was barely 24 months after Solyndra had received aloan worth half a billion grant from the United States’ energydepartment. California’s Alternative Energy &amp AdvanceTransportation Authority (CAEATA) also had given Solyndra a $ 25.1million tax evasion (Platzer, 2012). The tax evasion break was meantto help Solyndra finance their construction of a solar panelmanufacturing plant. Solyndra was in a position to get loans becauseof the passing of energy law in 2005 that was authorizing the energydepartment to issue loans for creative projects that were directedtowards limitation of air pollution.

Whenthings got serious at Solyndra Company, they had to lay off 1.100employees, and their manufacturing &amp production processes stopped(Platzer, 2012). The management complained that the productionprocess was too expensive as the prices of their products of solarpanels were reducing. The reduction in the prices came as a result ofthe competition from some Chinese Solar manufacturers. The conditionof Solyndra Company got worse at a point the administration refusedto allow an addition to additional capital on August 30th. Thegovernment’s refusal left the company in an unstable condition withtechnically no money to keep its operations moving.

Legaland Ethical Issues Surrounding Solyndra

TheUS Federal Criminal Investigators investigated Solyndra under theoffice of the attorney general and the department of justice. Theinvestigations were conducting before and after the company had filedthe bankruptcy. During the investigations, there are some ethical andlegal issues that the investigating bodies identified in thecorporation’s operations. Solyndra management was advised toaddress some the issues that they were not doing as expected by theregulatory agencies.

LegalIssues at Solyndra’s Company

Thereare legal issues Solyndra would need a redress as the results of theinvestigators proved that there were matters that were not in orderin the company. The first was questioning whether the management ofthe enterprise and the company as a whole misrepresented the firm’sfinancial health that was governing the companies. The investigatingbodies also were concerned with whether there was any accountingmalpractice involved the company (Stephens &amp Leonnig, 2011).There was a case that there were many other legal issues that wereraised by the House Committee. The Republican findings came up withcomplaints of the Solyndra’s management refusal to discuss theircustomers’ contracts. The Republican argued that the company was onthe verge of engaging a trustee to take charge their firm (Kao,2012). By giving back private investors their money when SolyndraCompany fell before the taxpayers were in contrary to the energy lawsof 2005.

LegalIssues Raised by Solyndra’s Employees

Theemployees that the company laid off sued the management of theSolyndra ask they requested to get compensation. The employeesclaimed that Solyndra did not acknowledge the provisions of theirunion, Workers Adjustment &amp Retraining Notification (WARN). Theunion’s act stipulates that employees need to be forewarned within60 days by a company before they are laid off. In the suit, theemployees sought to be paid for the 60 days’ pay and be given401,000 contributions. The suit also demanded health benefits formore than 1,100 employees that were laid off less severance pay(Brewer, Kinsey &amp Mendenhall, 2012)

EthicalIssues Facing Solyndra

Theinvestigations carried at the company revealed that one of thebiggest investors in Solyndra Company was a financier of thePresident Obama’s campaign project. The connections with closepresident’s friends influenced a quick release of the half abillion loan to the company without following legal procedures(Tracey, 2012). One would ask whether a business would survive on aloan that it obtained illegally. Management of Solyndra would not becourteous in handling funds that they got through back doors. The USenergy department also illegally asked Solyndra Company not to layoff their employees until the primary elections of 2010 were over(Stephens &amp Leonnig, 2011). The power unit influencing thelaying-off of the employees of the company on a political basis showsa lack of objectivity on the side the board of the department. Itmerely implies that there was some political interference with thefunctioning of the energy department.

TwoLaws and anEthical Code that would apply to the Situation

Thereare some laws that the company overlooked in the Solyndra case. A lawsuch as the Energy Policy Act of 2005 explicitly states, “TheDepartment of Energy should always consult with other bodies. Thebodies would be the Secretary of the Treasury and the OMB beforeproviding any deviation in the loan” (Stephens &amp Leonnig,2011). The Department of loans was ignored this law when the awardedprivate investors their dues before considering the welfare of theemployees. In the whole process of loan awarding, there was noconsultation as the issuing of loan based on political influence.

Anotherlaw that was not followed by the Solyndra Solar Company was in theevasion of tax. The company chose to file for bankruptcy so in orderfor them to keep millions of dollars operating losses that they wouldlater use in reorganization process (Burger, 2012). One would alsoargue that there was an abuse of an ethical code of honesty whenSolyndra Company did not inform the DOE about its financial problems.It would be proper for the company to be honest before getting a loanmore so when they realized that one of its chief financiers GeorgeKaiser was a prominent fundraiser for President Obama. Georgeprovided the company with $75 million to help in financing theproduction process of Solyndra in February at a time when there was arefinancing of the government (Crawford, 2015).

TheRelations between Milton Friedman’s Philosophies to this Situation

MiltonFriedman is a 20th-century economist. He advocated for free marketsfree from governmental influence. Milton argued that the marketswould flourish without the without government regulations in themarkets. He did explain the differences that would be there betweenmarkets and the state in his television show of “Free to Choose.”Milton used simple language to pass information on the importance ofhaving unregulated markets within a country. Many governmentsfollowed his liberalization line of thought and privatized most oftheir state corporations (Ghoshal, 2005). They had hopes on theliberations that Milton Friedman preached in his shows and decided toimplement them. The philosophy was sound as it sought to savecompanies such as Solyndra from the influence of the government. Whena corporation is frequently interrupted by the government in any way,there will be more cases of corruption in the same company.

SinceMilton Theory relates to Solyndra Company, one would argue that whathappened on the financial status of the company had the governmentnot have interfered with the corporation’s operations. Thegovernment would have left the energy firm to use its methods andabandon the speculations for the market experts like venturecapitalists to deal with such situations.

AnEthical Framework That Applies To This Situation

Whenit comes to a moral framework, they are some that apply to the statusof Solyndra. The framework would be one that directs the governmentnot to engage in the operations of any particular industry includingstartups companies as a venture capitalist. A government comes in tocreate an ethical framework that regulates the market for all theindustries in the production of solar panels. The regulation processshould in an equitable manner without any form of bias. Thegovernment should make the companies responsible for the adverseeffects of their activities be it in the contribution to globalwarming or misuse of grants by the management (Woody et al., 2003).Solyndra was unfairly handled as they related to a close friend ofthe US president. When there is bias, the objectivity of thegovernment bodies would not be useful.

Howother Ethical Frameworks would Influence the executives of Solyndra

Aboutthe moral and legal proceedings of the case of bankruptcy of theenergy firms, most of the executives of the company pleaded in thefifth when they were in front of the house committee. Being that thesenior employees of the company were already aware of a possible fallof Solyndra Company, they were fighting for their benefits inadvance. Some senior employees of Solyndra had previously worn and acase to have them gets bonuses of $ 370, 000 after achieving thecompany’s full liquidation. Solyndra Company would have survivedthe financial woes that were facing. Most of the company`s investorsagreed that in case the government would have not interfered with themanagement of energy firm, the company would have survived thechallenges. The challenges were the company was going through at thetimes of its financing crisis (Crawford, 2015).Therefore, it would bewise for governmental agencies to restrict themselves to regulatoryfunctions to businesses and refrain themselves from frequentinterference.

References

Alberts,C., Dorofee, A., Stevens, J., &amp Woody, C. (2003). Introduction tothe OCTAVE Approach. Pittsburgh, PA, Carnegie Mellon University.

Brewer,B., Kinsey, M., &amp Mendenhall, A. (2012). Solyndra.

Burger,W. E. (2012). State of Justice, The. ABAJ, 70, 62.State of Justice,The. ABAJ, 70, 62.

Crawford,J. M. (2015). Solar Power Struggle: The Inter-Branch Dispute Overinformation in the Solyndra Congressional Investigation. Seton HallLegis. J., 39, 1.

Ghoshal,S. (2005). Bad management theories are destroying good managementpractices. Academy of Management learning &amp education, 4(1),75-91.

Kao,H. (2012). ABC News, Beyond Solyndra: Examining the Department ofEnergy`s Loan Guarantee Program.

Platzer,M. D. (2012). US solar photovoltaic manufacturing: Industry trends,global competition, federal support. Washington, DC: CongressionalResearch service, 6.

Stephens,J., &amp Leonnig, C. D. (2011). Solyndra loan: White House pressedon review of solar company now under investigation. Washington Post.

Tracey,D. K. (2012). Missing Lending Link: Why a Federal Loan GuaranteeProgram is Critical to the Continued Growth of the Solar PowerIndustry, The. NC Banking Inst., 16, 349.