Some may think the global warming ‘deniers’ view this development of alternative energy company failures with a certain amount of glee but that’s not the case, at least it shouldn’t be.
I’m all for alternative energy sources that would lesson our dependence on imported oil, (Of course we could solve that problem by allowing us to use the oil resources we have, but that’s another story.) and would be affordable and easy to access (where can you recharge an electric car?).
Obama has apparently given many entrepreneurs the false impression that people are lined up to buy these alternative energy sources as soon as someone makes them in spite of their costs and impracticability.
That’s not the case in the free market, here people buy what they want. In Obama’s dream world they’ll buy what the government tells them to buy. We’re not that far in Obama’s world yet, although he’s driving us hard in that direction.
By Katherine Yung
Detroit Free Press Staff Writer
In the latest setback for the solar energy industry, Auburn Hills-based Energy Conversion Devices said today that it has filed for Chapter 11 bankruptcy and intends to sell its assets, including its main subsidiary United Solar Ovonic.
“We firmly believe there is a strong and sustainable commercial market for Uni-Solar products,” Julian Hawkins, ECD’s CEO and president, said in a statement. “However our current capital structure and legacy costs are preventing USO from making the investments necessary for the future of the business without restructuring through the bankruptcy process.”
The maker of solar roofing materials, which will continue to operate, employs 750 workers, 60% of them in Michigan. They will remain active employees during the sales process though some have been furloughed, said company spokesman Michael Schostak.
ECD also said it has sold its Ovonic Battery Co. to BASF Corp. for $58 million in cash before transaction fees and other factors. The battery subsidiary’s 35 employees have been hired by BASF.
ECD has retained the investment banking firm Quarton Partners to manage the sale of its assets, which is expected to be completed in 90 days. It has $145 million in cash and short-term investments to enable it to operate through the bankruptcy proceedings and will not need debtor-in-possession financing.
The bankruptcy follows an unsuccessful effort by ECD to find additional capital. In November, the money-losing company suspended manufacturing to cope with high inventory levels and announced the layoffs of 500 employees. Its sales have suffered from cutbacks in solar energy incentives in Europe and a worldwide glut of solar panels. Analysts also said the company’s technology was no longer competitive.
The solar panel industry is currently going through a consolidation that has already claimed several weaker players, such as Solyndra.
The bankruptcy filing means ECD shareholders will take a hit. The company said it “does not expect to generate proceeds sufficient to satisfy all of the company’s pre-existing obligations to its creditors.” It expects that no distributions will be made to holders of its common stock unless it realizes a greater-than-expected value from the sale of its assets. Its common stock will be extinguished once its bankruptcy plan has received court approval.
Long before it turned its focus to solar energy, ECD had pioneered nickel-metal-hydride batteries. The company was founded in Detroit by Stanford Ovshinsky, a famous local scientist and inventor, 51 years ago. In 1990, ECD established United Solar Ovonic, which eventually became a leading producer of thin-film solar laminates for industrial and commercial buildings around the world.
Uni-Solar, as the subsidiary was called, became so successful that it opened four Michigan plants, two in Auburn Hills and two in Greenville. But since 2009, the company has struggled amid increasing competition. It built a plant in Battle Creek but ultimately never utilized it. ECD has lost more than $765 million during the last two years.