State-Subsidized Company Files Bankruptcy and Heads to China
- Posted on August 15, 2011 at 5:35pm by
Jessie Abrams
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A state-subsidized energy company filed bankruptcy Monday, listing almost $500 million in debt.
Evergreen Solar Inc. is the Massachusetts-based clean-energy company that received subsidies from the Patrick-Murray Administration in order to fund a new factory in its home state, according to a report from The Boston Herald.
Here’s a video of the Massachusetts governor at the time, Deval Patrick, making a speech in 2008 to congratulate the expansion of Evergreen Solar and to illustrate his vision of private business and government working together to build, what he called “a different kind of business climate to grow that sector.”
Republicans in Massachusetts called Patrick’s later $58 million aid package a “waste” of money.
“The bankruptcy of Evergreen Solar is another sad event for the Massachusetts company and highlights the folly of the Patrick-Murray Administration which has put government subsidies into their pet projects instead of offering broad based relief to all Bay State employers,” said Jennifer Nassour, head of the state GOP.
Massachusetts Gov. Deval Patrick and Evergreen Solar CEO Rick Feldt
The company specializes in creating solar panels. The decreasing demand for that technology coupled with lower-cost competition in China put the company on its heels. When it shipped some of its production out of the United States to a factory in Wuhan, China, company officials said they would have to start laying off American workers.
The job cuts started at the Devens factory, where no fewer than 800 people lost their jobs in March – that’s the factory Gov. Deval and then CEO Rick Feldt were introducing in the video above. And, coincidently, March is the same month Evergreen official, Michael El-Hillow, said the company had “earned” 85 percent of the taxpayer benefits it received because of the jobs it originally created. In April the company warned investors of how quickly it was going through money, especially since the selling off of the Devens factory brought feeble returns. Evergreen said it’s now planning to cut at least 65 more jobs, mostly from a shutdown of its facility in Midland, Mich. If that happens, the company will have less than 70 employees – at least in the United States – according to a head count listed in the bankruptcy filing. Evergreen Solar’s joint venture with the factory in Wuhan, China will continue to operate, depending on the wishes of Chinese investors.
And shareholders shouldn’t expect to see many of their investments coming back to them. The company suffered almost 60 percent losses on Monday, finishing the Nasdaq at 18 cents a share. Evergreen officials told The Boston Herald that investors will probably receive “no distributions” from the asset sales after creditors are repaid.
The troubled company announced that it has filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Delaware. Evergreen also announced that it would try to sell its assets under the reorganization, including a technology that one energy blog refers to as the core of the company’s existence.
The state of Massachusetts is still trying to recover about $4 million from the Marlboro-based company.
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Comments (47)
varnell99
Posted on August 16, 2011 at 11:20amGiving money to favorite businesses and then having them move to another country is the best way for obama to redistributie the wealth. By giving the money to the businesses it look like the government it trying to help. It is just smoke and mirrors.
Report Post »shazam3
Posted on August 16, 2011 at 6:32pmThis was a scam from the start. I’ll bet the big boys in the corp made millions. This type of scam will continue until the Gov gets out of private business. The wind machines have been a sham for over 20 years with the skeletons of the previous GOV giveaway blighting the Western US. The same will happen to the modern ones, no one will fix them and they too will be blights. Corn for fuel, avocado ranches, mink farms all the tax scams. I’ve seen other businesses start in small communities with local and state help that bellied up in 2 years with the owners getting rich.
Report Post »Jaycen
Posted on August 16, 2011 at 8:50pmEveryone in the business knew this was a scam.
I work in the steel forming industry. I’ve spoken to several company owners who have taken contracts to produce the structural components for the panels. Every – Single – One states, “Look man, there’s a lot of money to be made on solar panels right now, but you gotta get in and GET OUT, quick! The government is subsidizing the hell out of it, but when people figure out what’s going on the money is going to dry up quick.”
I’ve heard almost those exact words from two different production managers and similar sentiments from several more.
Green jobs.
Report Post »momsense
Posted on August 16, 2011 at 10:29amPay attention, Obama! it;a happening more and more since your EPA and your regulators took charge. Guess we’ll see more of it in the future.
Report Post »AmericablessGod
Posted on August 16, 2011 at 10:01amThis is a travesty! This must be exposed and these frauds must be removed from office in 2012, if not sooner. This so-called energy policy is bankrupting America, costing countless jobs, driving the cost of energy up and making us more (not less) dependent on foreign sources of oil.
In my area, Duke Energy has decided to close one of their coal plants due to the cost of complying with new regulations, costing 500 jobs and making our primary source of electricity more expensive. Nice going, O!
Report Post »republic2011
Posted on August 16, 2011 at 9:58amThis has nothing to do with free trade vs. tariff based trade. If we didn’t have unions artificially inflating salaries, unsustainable entitlements, ridiculous levels of regulation (EPA, etc.), we could actually compete on the world stage. You think those poor saps in China get benefits? You think China imposes ridiculous regulations on companies? You think the they make a lot of money for manufacturing jobs in China? No, No and No. Tariffs, historically, were always a bad idea. Real free trade and real capitalism work. Unfortunately, we have had neither for over 100 years. Make it easier for the average Joe to start a business and promote a new idea/invention, and you won‘t need to worry about greedy CEO’s shipping jobs overseas. Don’t be useful idiots and believe we can solve anything with more government.
Report Post »Lesbian Packing Hollow Points
Posted on August 16, 2011 at 9:44amThis is a fine example of why we need to throw off the insanity of “free trade” and return to tarriff based trade.
Report Post »mike1956will
Posted on August 16, 2011 at 9:57amI agree completely!!
Report Post »mike1956will
Posted on August 16, 2011 at 9:57amI agree completely!
Report Post »Quixotic-911
Posted on August 16, 2011 at 10:36amAlexander Hamilton said their is no such thing as free trade and seeing what NAFTA has done to our industrial output I’ll have to agree with our first treasury sec.
Report Post »lylejk
Posted on August 16, 2011 at 5:14pmSpeaking to the choir with me LPHP; we need revenue and I don’t see directly taxing the populous. Bringing tariffs back will mean some things will cost more, but it will also mean businesses will be forced to come back if they want to sell us stuff at a reasonable profit to them. Bring the tariffs back and the jobs will come back. End NAFTA/GATT. :)
Report Post »ginger100
Posted on August 16, 2011 at 9:32amPresident Obama, the only President to own more slaves than President Jefferson.
Report Post »MrWill
Posted on August 16, 2011 at 10:43amGood one!
Report Post »ColoradoMaverick
Posted on August 16, 2011 at 9:14amWhen Obama said that his policies would create millions of new jobs, the liberal mass media didn’t bother to ask him in what country those jobs would be created. Good job BO!
Report Post »daveycrokett
Posted on August 16, 2011 at 9:13amloriann12..I agree with you 100%..where are the tariffs on this cheap chinese and korean junk. I would also say if they wanr to make thier products in china then let them sell them in china
Report Post »love the kids
Posted on August 16, 2011 at 8:47amFolks, this is what’s wrong with what is going on. I am shocked to find this story about 20 stories down, and all I have found is 17 comments.
Report Post »This is a govt. funded company, one of which Obama will be the jobs of the future, and it is taking the state money and going to China. So not only did taxpayers foot the bill in the first place, now they have to foot the bill for the bankruptacy. I’m sure I can go on any Mainstream media today and find this story. PLEASE foward this story to everyone you can.
hempstead1944
Posted on August 16, 2011 at 8:44amSo much for the “Green” business model……..what a waste of money, time and people’s lives……
Report Post »matt708
Posted on August 16, 2011 at 8:34amInstaed of jobs why don’t we send , the President, Piglosi, Reid and all the rest of the liberal progressives to China and let them work their wonderful ways over there.
Report Post »JQCitizen
Posted on August 16, 2011 at 8:34amSo, now the factory is TWICE THE SIZE, and EMPTY? Sounds like a PLAN!!!
Congratulations, President Obama!! Sterling performance!!!
Report Post »JQCitizen
Posted on August 16, 2011 at 8:34amSo, now the factory is TWICE THE SIZE, and EMPTY? Sounds like a PLAN!!!
Congratulations, President Obama!! Sterling performance!!!
Report Post »matt708
Posted on August 16, 2011 at 8:33amImmelt from GE must be running this company also. what a bunch of losers and we allow them to do this.
Report Post »abunchofbullshit
Posted on August 16, 2011 at 7:50am“Don’t pay her” was the answer if the editors/slashers post my first comment.
Report Post »abunchofbullshit
Posted on August 16, 2011 at 7:49amSo one either thinks Obama is really stupid or really smart and has a grand plan; I the latter. Time for a Tax Revolt yet??? I’m game if you are! Remember the old saying; “How do you make a whore moan?”
Report Post »let us prey
Posted on August 16, 2011 at 7:41amWhat a bunch of suckholes. We all knew that China was going to make obummlers solar panels, right? They bought up precious metals for this very reason.
Report Post »$58 million later [of stimulus money] Evergreen is gone.
Did Obummler promise that solar panels would keep america working?
loriann12
Posted on August 16, 2011 at 8:15amThe only way solar panels will keep Americans working is if the put an import tax on the ones from China that would raise the cost of them to what we can make them at. We don’t have the luxery of paying our people $1 a day and forcing them to make stuff. We have to pay decent wages (and like it that way, except for the unions extremely high wages). We need to take every single item shipped here from China and put a tax on it that raises the cost for consumers to buy it to what we charge.
Report Post »South Philly Boy
Posted on August 16, 2011 at 7:28amFed Govt gets TOO MUCH MONEY.
Report Post »clingingtogodandguns
Posted on August 16, 2011 at 7:22amWTF this can’t be Obummer said green jobs was the future.Another failure thanks Obommageddon,why didn’t he go their for his magical misery tour.
Report Post »Jack2011
Posted on August 16, 2011 at 7:10amIf the solar panels are so great, why aren’t solar panels on top of their solar manufacturing building providing electricity to run the factory?
$58 million aid package!!! I bet that money is being used to build a new plant in China.
China energy costs ARE LOWER. Massachusetts has Cap and Trade energy taxes. There is NO WAY MA can compete with China.
Report Post »Mateytwo Barreett
Posted on August 16, 2011 at 6:38amThis is news? I am sure I saw this storu months ago, or is it that the bankruptcy just got finalized. Either way- GREAT JOB VAN JONES!!!!!
Report Post »carbonyes
Posted on August 16, 2011 at 6:05amWhat a “perfect” representation of the colossal failure of Obama’s governmental intrusion in hand picking their “business” partners and supporting failed industries based on wishful thinking instead of tried and true energy resources. Drill baby Drill!
Report Post »Scarab Sport
Posted on August 16, 2011 at 4:40amThis ‘green jobs” thing is a joke. Pumping government stimulus money into these businesses is a waste. The free market should ditcate which companies succeed or fail. Keep the government out of it. How much taxpayer money has been wasted on such misguided business ventures? Way too much. A political snow job.
Report Post »the_ancient
Posted on August 16, 2011 at 5:26amIt is more than joke, for every “Green” job temporally created 2 permanent jobs are lost….
Report Post »SHOWMESTATEGUY
Posted on August 16, 2011 at 3:44amIf this wasn’t so sad it wouild be funny. The Republicans need to run this as part of their campaign ads. The dems try to make the case that Republican positions cause companies to flee America. People need to know that the reason jobs leave this country has a different root cause. The dems will never learn that just because you want something to work doesn’t mean it will.
Report Post »Arc
Posted on August 16, 2011 at 2:53amStands to REASON given the mystic approach to governing our politicians have been advised to pursue ( a la Van Jones et al )
Report Post »Surely the climate for “free enterprise” hasn’t been altered??? The current administration is so “ clueless” when it comes to business sense( read common sense)
This “bankruptcy” is just the beginning. If it’s not that, it will be considerably more overseas job migration,not to mention more Switzerland moves.
Ahhh, but no worries, politicians have things well in hand……