Wow! The guys over at Solyndra have a serious set of stones.
As if it weren't enough that the failed solar company sucked up more than a half billion tax dollars — all while greatly damaging the reputation of an industry that is actually one of the fastest-growing in the world and one of the largest job creators in the United States in 2012 — now these guys are looking to score another $1.5 billion from China.
According to reports, Solyndra recently filed a $1.5 billion antitrust suit against three of China's largest solar panel manufacturers: Suntech (NYSE: STP), Trina Solar (NYSE: TSL) and Yingli (NYSE: YGE).
The now bankrupt solar company claims the Chinese government and banks conspired to destroy it by flooding the market with cheap product.
Hey, Solyndra — guess what? The flooding of cheap Chinese product was never designed to destroy you...
It was designed to crush all competition in the global solar marketplace.
And thanks to cheap labor and what seems to be dozens of blank Chinese checks, that's exactly what the Middle Kingdom has done.
Don't Hate, Participate!
Check out the excerpt from this recent lawsuit:
Recognizing that they could not keep pace with the innovation presented by Solyndra’s technology, defendants entered into a conspiracy with each other and, pursuant to national and local policies directing commercial growth and dominance in the United States market, with key suppliers and lenders to dump product at predatory levels, and to drive Solyndra and other American solar manufacturers out of business.
Sure, there is a set of laws, regulations, and standards the global business community is supposed to adhere to.
But let's face it; any country that can get away with bypassing these barely-enforceable mandates does so on a regular basis. China does it. The United States does it.
Truth is world economic powers don't become world economic powers by following rules and playing nice.
Now, understand I don't say this to excuse unethical behavior, but simply to point out a reality that some of these holier-than-thou solar losers don't want to admit.
Quite simply, the bully fist of China is no different than the bully fist of any other country that's ever gained an economic or geographically strategic upper hand. And frankly, at what point did we come to this conclusion that "fairness" is even relevant when it comes to global trade, anyway?
Yeah, on paper it looks nice. And certainly the politicians like to talk it up. But in practice, it's not even an afterthought.
Look, is it fair that China floods markets all over the world with cheap product in order to control market share?
Of course not.
But it doesn't matter to the Chinese — or to all the folks in this country that overwhelmingly choose “Made in China” bargains over quality-made U.S. products every single day.
And fairness never mattered when Solyndra was able to gain access to both the Bush and Obama administrations, thereby enabling the company to siphon more than a half billion dollars from taxpayers.
There are plenty of other ground-breaking solar technologies (not that Solyndra really had anything all that “ground-breaking” in the first place) and solar installation companies that could've actually accomplished a lot more with a lot less of that lucre.
But those companies didn't have a free pass to 1600 Pennsylvania Avenue like Solyndra did... which is why I suppose this Solyndra lawsuit is so absurd.
But believe it or not, it actually gets worse.
As Bright as a Beijing Sky
While taxpayers get screwed on the Solyndra deal, Solyndra owners may now be able to walk away with another $150 million.
I'm serious! Turns out the IRS has suggested Solyndra's bankruptcy plan was essentially a way for owners to use an empty shell corporation to avoid paying taxes.
As stated by the IRS, the only reason for the shell corporation to exist post-confirmation is to enable its owners to exploit tax attributes, which would be lost in liquidation.
Tax expert and Forbes' contributor Robert Wood recently wrote: “Is it a good deal for creditors to get $7 or $8 million out of the Solyndra mess? Maybe, but the IRS claims the outsize tax benefits Solyndra’s smiling owners will reap are more like $150 million.”
If this all adds up, I think the real conspirators here are the folks that facilitated this entire Solyndra fiasco.
At least the Chinese have a market for their product...
Of course, China's dominance in the solar space won't last forever. The Middle Kingdom's heavily-subsidized and heavily-manipulated solar industry will eventually crumble, because over-investment always leads to failure.
Nouriel Roubini pointed this out last summer, using the Soviet Union in the 1960s and 1970s, and East Asia before the 1997 financial crisis as examples of over-investment scenarios that have gone wrong.
Rest assured global solar demand will only continue to grow by leaps and bounds. And this is why the big dogs — like GE (NYSE: GE) and Siemens (NYSE: SI) — are watching and waiting patiently, ready to pounce when the future of China's solar industry inevitably becomes as bright as a Beijing sky during rush hour.
If you're unfamiliar with that reference, here's a visual:
Some view, huh?
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.
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