The Download: Evergreen Solar flameout
Wednesday, January 19, 2011
Massachusetts continues to fume over Evergreen Solar’s decision to decamp to China, throwing more than 800 people out of work and squandering most of a $58 million package of incentives from the state.
But with the company in survival mode, rampaging Beacon Hill lawmakers are the least of its problems. In tandem with the layoffs and relocation, the start-up launched several risky debt restructuring maneuvers, the Worcester Business Journal reports. Jettisoning Bay State workers saves the company nearly $350 million. Unfortunately, the company currently has $300 million in outstanding debt and is looking to borrow another $40 million.
According to the Journal’s analysis, the strategy, which involves some creative borrowing, is questionable. So far the Nasdaq isn’t impressed. When Evergreen’s shares fell below $1, it kicked the company off the exchange. Yesterday, state officials said Evergreen has to hand back $3 million in cash
But the Journal finds that finances aren’t Evergreen’s only problem. When Evergreen decided to cut back on the use of silicon in producing its panels, the company gambled that silicon prices would remain high. But relying on the price stability in the market for silicon did not pay off, as the commodity’s prices took a nosedive.
Back on Beacon Hill, state officials have called on Evergreen to return $3 million. Coincidentally, that is all company officials said they owed the state in the first place.
Housing and Economic Development Secretary Greg Bialecki also said on Tuesday that the state only invested $31 million in the firm; but that doesn’t include other incentives like roads, utilities, and lower real estate taxes.
Predictability, the commentariat is piling on. Keller@Large shoots a skeptical eye towards Gov. Deval Patrick’s claim that the state’s investment in Evergreen was and is a good thing. Stock analysts hit the Patrick administration for not knowing the company was a sucker's bet.
Cue Harvard economist Edward Glaeser to deliver the coup de grâce. “Failed public investments, like the money spent in Devens, reflect the fact that public officials are rarely skilled venture capitalists,” Glaeser opines in his “Why Green Energy Can’t Power a Jobs Engine” post on The New York Times’s Economix blog.
Gov. Deval Patrick unveiled a new pension reform proposal that, the Globe reports, would require state and municipal workers to “work five years longer, contribute more to their pensions, and have their benefits slashed if they retire early.” The proposal gets positive reviews from local officials, reports the Salem News.
New gun legislation leads the biannual raft of bills Boston Mayor Tom Menino drops on the State House.
Fall River officials nix the Mashpee Wampanoag’s $21 million offer to buy land to build a casino. They are betting on a biotechnology park instead.
Salisbury's police chief, under investigation for some manner of yet-to-be-disclosed alleged lawbreaking, resigns.
Beverly Mayor Bill Scanlon offers $100,000 to the schools to help deal with a $415,000 deficit, according to this story in the Salem News.
Chris Scott, the Lowell superintendent of schools, abruptly decides to leave, saying the school board was not going to offer her a contract extension.
A Lowell building inspector is indicted on charges he swindled a dying woman out of her home, the Lowell Sun reports.
Sen. Joseph Lieberman, the Connecticut Independent who usually votes with his Democratic colleagues, is retiring. And the crowd goes wild.
Speculation abounds that Rep. Darrell Issa, the California Republican and newly minted chairman of the House Oversight and Government Reform Committee, has Countrywide's VIP mortgage program at the top of his hit list, which could make things uncomfortable for two Democrats fleeing the political spotlight, Sen. Kent Conrad, the North Dakota Democrat, and former senator Chris Dodd, the Connecticut Democrat.
Michael Tanner, in the National Review, urges Republicans to stand fast against raising the debt ceiling without promises of spending cuts, saying the forecasts of Armageddon are off-base even though he admits it would be a shock to the economy and the bond markets would crash.
The Salem News says the sentence given Patrice Tierney, wife of US Rep. John Tierney, was fair.
Cranky Republican Dick Armey, the former House majority leader, wants to eliminate the Department of Housing and Urban Development.
Sarah Palin makes Barack Obama look good. Insert your own punch line here.
On his last full day in office, Auditor Joe DeNucci released a report accusing the MBTA of unnecessarily handing tens of millions of dollars in contract fees and incentives to the firm that operates the region's commuter rail trains.
Officials in both Quincy and Weymouth are united in their opposition to the state’s plan to replace the Fore River Bridge with a vertical lift structure rather than a drawbridge like the one that was falling down.
The family of a North Carolina teenager who fell out of the wheel well of a jet approaching Logan Airport is exploring a lawsuit against the Transportation Security Administration, WBUR reports.
Two down: Following in the footsteps of her former boss, ex-probation commissioner John O'Brien, the department's number two official, Elizabeth Tavares, has also resigned just before a scheduled disciplinary hearing that would likely have led to her ouster.
Cape Wind officials say they could start construction as early as this year after getting what they say are their last two required permits, the Cape Codder reports.
California's shotgun marriage to compact florescent light bulbs hasn't been as blissful as expected.
The New Republic's Jonathan Cohn explains how the federal health care law could be undone by court challenges – and how lots of other regulations could get swept out in the process.
wants to know whether Paul Levy got a golden handshake on his way out the door as president of Beth Israel Deaconess Medical Center, and he's really irked – and thinks we all should be – that no one will tell him.
Need another reason to not start smoking? A new study reports the cancer-causing chemical in tobacco begins damaging DNA within a half hour of having a cigarette. Via US News & World Report.
TIGER MOM FALLOUT
reports on the “Chinese Mom” backlash – in China.
From the University of Virginia’s Presidential Recordings Program: Lyndon Baines Johnson put in a graphic order for slacks in 1964, as only LBJ would.
Sargent Shriver, founding director of the Peace Corps, one-time vice presidential nominee, and Kennedy family in-law and confidant, died Tuesday at age 95.