I'm not sure if I'm ready to say business and politics shouldn't mix -- I can't see how to avoid it. But the skirmish over Solyndra LLC's bankruptcy is all about politics. If it had been more about business, the whole mess could have been avoided.
For those of you not following the story, the Obama administration backed a $535 million loan guarantee for the California solar panel maker. The move was part of an overall government initiative to spur development in solar power and other clean energies. The problem, other than this week's bankruptcy filing, is that the government's due diligence indicated Solyndra was in trouble as early as 2009. Two independent audits raised red flags about its long-term viability.
Either due diligence was ignored, or the government rushed to back the loan as part of its political agenda.
Now the deal is under investigation, and the responses have broken straight down party lines. Republicans accuse the White House of pushing its agenda to the detriment of fiscal responsibility. The Obama administration insists it granted the loan on the company's merits. Some in the GOP say global warming is a scare tactic embraced by the left. Most Democrats say the environment is in grave danger.
Politics aside, let's look at the business case. If I were a potential investor in a company, would I conduct due diligence? Would I require independent assessments of its business plans? Would I expect regular reports on its progress? Would I go over every report with a fine-toothed comb? Yes to all of the above.
Here's my problem. I consider that $535 million my money. A portion of it came from my taxes. Independent research indicated Solyndra was headed for trouble. The loan was granted anyway. It's bad business.
I can't even begin to list all the ways the government (under all administrations) uses my tax money in ways I do not support. But for the most part, I recognize when my objections are political and when they are not. As complicated as business is, some things are pretty cut and dried -- look at the numbers, measure your risk, and ask a lot of questions. Make a decision based on business, not politics.
Even though I am an avid supporter of alternative technologies, this is one investment I don't think I would have made.
@ Pocharle, you asserted, "The more important question is, why do they get involved in any type of business besides the business of providing oversight and regulation (to some extent)"?
I agree with this extract from Frederic Bastiat, "would a busybody who believed he/she knew best seek to have power over others? certainly! In my view any forms of government is a business in itself. Why? The government is charged with appropriating the use of my tax contributions for the provisions of various services a state or nation would ideally provide ( whether I agree to it or not).
My question is, can there be a real separation between business and politics? I don't think so.
It is obvious from the California Solar panel maker - this is politics at play. How can you possibly ignore two independent audits report about a company's long term viability and yet Obama administration guaranteed a $535 million loan. This is laughable!
"Make a decision based on business, not politics." If we mix this together we have a bad result. I think first we must have the political aspect and in which direction should go and then if we can do it in business terms. He Shouldn't took a decision based only to what we would like to do.
Sometimes such decisions are difficult to be made. Remember, many companies would have filed for bankrupcy if not for the goverment funding. As they say: "success has many fathers, whereas failure has just one". But of course, this doesn't exonerate the government from its responsibility.
"Why do they get involved in bad business politics?"
_hm,
The more important question is, why do they get involved in any type of business besides the business of providing oversight and regulation (to some extent)?
Even though I am an avid supporter of alternative technologies, this is one investment I don't think I would have made.
@Barbara, I share your conern but unfortunately politics is everywhere. Most of the decisions that the government takes are all politically motivated rather than on the merits of the decision.
Yes, Government should not get involved in this type loan. They have so much of more essential work. Why do they get involved in bad business politics. Who shall be responsible for this decision?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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