Free Solyndra Essay Sample
Solyndra solar corporation represented a beginner manufacturer of cylindrical solar panels centered in Fremont, California. Solyndra offered cheap solar panels that were stress-free to erect as, different from the old solar panels, Solyndra panels did not necessitate concrete footings. The factor represented the reason why the administration chose the company to obtain state loan assurance from the energy department as a means of boosting the growth of clean energy. Solyndra's problems started on 31st August 2011 when it filed for Chapter 11 insolvency 24 months after obtaining half a billion credit grant from the US energy department and an extra $ 25.1 million levy break from California's Alternative Energy & Advance Transportation Authority (CAEATA).
The credit and tax break were established so as to aid Solyndra fund the creation of a solar panel industrial structure. The finances given were made conceivable owing to an energy regulation approved in 2005 that sanctioned the department to provide state-funded loans for creative ventures that aided reduce air contamination. Some personnel was laid off, and industrial and production stopped as the corporation had as of that instant, become defunct. The explanations specified were that manufacturing was becoming extremely costly and solar panel rates were falling. Also, the management claimed that the move was owing to rivalry from Chinese creators. The final blow to Solyndra's company was where the government nosedived in agreeing on the boost of extra funds, therefore, leaving Solyndra twisting in the wind with theoretically no cash to facilitate its tasks.
Legal and Ethical Issues Surrounding Solyndra
Legal matters to be discussed were whether the corporation and those who were answerable to it misrepresented the real state of the company's fiscal health or if there was bookkeeping misconduct involved. There existed a pile of numerous other lawful issues voiced by the House committee particularly the Republican group who expressed the subject on Solyndra's rejection to debate client agreements as it was in the procedure of hiring a fund manager to take control of the failing energy corporation. The matter of private stakeholders being refunded their cash back if Solyndra went belly up afore the levy payers was regarded as contravening the energy law of 2005. Within a few weeks before and after filing for insolvency, Solyndra was under inquiry by the federal criminal investigations through the US. Attorney's office and department of justice The examination revealed that Solyndra administration offered defective facts regarding their actions, financial accounts, and feasibility of their future ventures. Even more disturbing, it was exposed that Solyndra loan assurance was hastily sanctioned owing to White House sway notwithstanding the caution from personnel in the Office of Management and Budget.
Nonetheless, the department of energy consciously overlooked these warnings and sanctioned the loan. Forfeiture of taxpayers' cash was credited to White House sway as it was then understood that the principal stakeholder of Solyndra was the main backer of President Obama's diplomatic crusade. Solyndra executives purportedly desecrated tax elusion regulations by filing for insolvency so they could retain millions of state loans as working losses. The move was a straight deviance from their ethical duty to adhere to corporation guidelines and protocols and further safeguarding the welfares of its employees. The U.S. Fair Labor Standards Act advocates that a company is required to inform the employees within sixty days before discharge by delivering the WARN (Worker Adjustments and Retraining Notification) decree. The personnel pursued to the entitlement of its sixty days remunerated, 401(k) contributions, well-being benefits, and the added indemnification for more than 1,100 personnel. The department of energy discovered that Solyndra could not honor its credit disbursements, a desecration of state loans contract. The factor was since, in 2010, department of energy consented to reform the conditions of credit agreement.
Nonetheless, the positions proved contentious since they postulated that when the occasion Solyndra filed for insolvency, the first $75 million found would be offered to a private equity company linked with George Kaiser, the huge sponsor of Obama crusades. The move desecrated the energy act (2005) that specified that a personal interest should not herald taxpayer's importance. The Solyndra incident showed a lack of moral reflection on the part of Solyndra administration as well as the department of energy since there was every sign that Solyndra was not performing as was professed primarily. In fact, the chief discovery of the congressional report showed that politics headed much of the government's pressure to accept loan assurance to Solyndra as hastily as conceivable. The move was a straight desecration of legal rules and good customs; in fact, Solyndra executives were cognizant of the necessities of this regulation.
The managers failed to satisfy ethical brink as cherished in contemporary commercial management, therefore dwindling in their part as transformational front-runners accomplished of navigating an establishment through a trailblazing rivalry fruitfully. Rather the managers regarded an unpopular feat that left employees unemployed and a legal suit to reimburse the personnel. Also, the U.S. Energy policy act requires that the department of energy must liaise with the Treasury's Secretary and the Office of Management and Budget before permitting any nonconformity in the loan. As they disregarded this provision, Solyndra's resources and monetary perceptions were not assessed and placed the prospect of loan reimbursement at jeopardy. The U.S. Code of Ethics was similarly desecrated. Solyndra failed to notify the Department of Energy regarding its monetary helplessness.
Laws that apply to the situation
Some of the regulations that were overlooked in the Solyndra case represents the energy policy act of 2005 which explicitly proposes that "DOE (Department of Energy) must liaise with OMB and the Secretary of the Treasury before conceding any nonconformity in the loan. The company's executives disregarded this rule when they selected to honor private stakeholders their payments before reimbursing private investors. The other decree usurped by the solar firm was the evasion of duties by filing for insolvency so that they could retain millions of dollars of networking losses that would be employed in the restructuring. The move represented a distinct deviance from their ethical duty to adhere to corporation guidelines and protocols as well as safeguarding the prosperities of its workforces. The moral code abused was that one of uprightness whereby Solyndra failed to notify the DOE concerning its financial problems. It was verified that the corporation was in the straits before receiving the reorganized loan. The move was when it was revealed that one of its top sponsors George Kaiser a conspicuous supporter of President Obama, offered $75 million to aid place Solyndra in a better of state in February at the period of the state's refinancing.
General legal concepts that were discussed in the required readings, i.e. Appendix B
There exist several legal concepts that apply to the Solyndra Corporation case. Among the concept is negligence. Conferring to Hasl-Kelchner (2006), a firm might face legal litigations owing to a charge of neglect. The executives should have known about the impact but chose to overlook it. Also, the concept of fiduciary duty emerges. According to Hasl-Kelchner, individuals in positions of trust and accountability like financial executives are needed to put somebody else's interests before their own. However, in the Solyndra firm it was not the case. Another concept regards employment and the discharge of workers. In the Solyndra incident, employees were wrongfully discharged and hence triggering a claim for wrongful discharge.
Philosophy of economist Milton Friedman
Milton Fried man represented a 20th-century economist, who championed for open markets unencumbered by administration interfering. Friedman's beliefs would leave the energy corporation to its devices and leave it to assume an autonomous fight for users. The move could eradicate the danger of mislaying a quarter-billion taxpayer money, and as a consequence, the government would not be liable for the company's problems. Milton contends that individuals with the duty of choice making in an establishment should not use social accountability in their capability as corporation executives. Instead, they should focus on growing firm's productivity. This standard might have inclined the Solyndra executives to stop industrial processes and file for bankruptcy while they had acknowledged incentive loan from the department of energy to augment their yield in green energy.
By filing for insolvency, Solyndra retained the loan fund as operating losses, which was valuable to principal shareholders of the company. As the proprietors hire the executives, they pledged their devotion by sacking all the employees to circumvent losses owing to competitive rivalry from Chinese solar industrialists described by deteriorating prices. Managers possess a duty to run commerce according to their aspiration to generate profit and upsurge stakeholder's equity while complying with simple society rules entrenched in regulation and moral customs. Hence, the executives should not have ignored the welfares of employees by sacking them. Milton Friedman further discourages administration intrusion in commercial establishments; in fact, he contends that state interference leaves the circumstances bad than it envisioned to cure. In Solyndra's case, record investors feel if the state had not intruded, the firm would have arisen fruitfully from the difficulties it was experiencing. Milton also claimed that without administration meddling the market would thrive. Thus, considering Milton Friedman's viewpoint, the government should have left Solyndra board to pursue answers for their difficulties within the market.
Though Friedman supports for a free market lacking of regime intrusion, he maintains that as a final good, the value of liberty can be pertinent in preparing other values for establishing the society like uprightness, moral consideration as well as a quest for ethical fairness and equity. Regrettably, Solyndra administration overlooked all these canons of moral fabric in which trades run and focused on maintaining the welfares of the key investors, in total contempt of employee's benefit. The management should have reflected the part of personnel as the record valuable asset of the firm by linking them to policymaking developments. Since Milton Friedman's theory relates to Solyndra, we may argue that had the state left the energy company to its devices and leave the assumption to market specialists like investment entrepreneurs then what emerged in the closing of the corporation, and the forfeiture of half a billion of taxpayers cash would not have occurred.
Ethical context other than Free Market Ethics
The ethical context that is pertinent in this case is one that integrates uprightness, openness, and moral reflection while performing their duties. The move would have protected the firm from ruin hence maintaining the spirit of the practical rule that backs for better welfares to all. The executives should not wholly contemplate making revenue by sidelining moral features of the business. Also, managers should have assessed the social influence of insolvency to employees and other shareholders. Nonetheless, Solyndra managers disregarded the doctrines of ethical fairness to safeguard the welfare of employees. Though managers could have rescued Solyndra through involvements like an entry in security exchange, they chose to stop all commercial activities and file for insolvency. The move was an unprincipled choice as it was unapprised and untenable managerial choices like monetary malpractice that compelled the corporation to append operations. The executives should have banked on moral tenet to reflect the social welfares of all shareholders instead of focusing on chief investor's interests only. The features of moral and utilitarian guidelines may have predisposed them to make real choices geared towards saving Solyndra Corporation from ruin. Solyndra executives were under a moral duty to maintain impartiality rule as an ethical context that pursues to allocate benefits and harms fairly. Nonetheless, the officials stopped industrial processes and fired all workers to preserve millions of taxpayers finance disregarding the predicament of employees. Moreover, the managers were significantly predisposed by the monetary principle of exploiting investors' wealth and creating profit by sidelining ethics and social accountability. Nevertheless, this approach is not viable in the contemporary commercial market as demonstrated in Solyndra Solar Corporation incident.
In conclusion, Solyndra Solar Panel Corporation might be utilized as a case study in financial institutes as it enunciates the consequences of unlawful and unprincipled actions that should be discouraged in corporate settings. The ethical errors recognized in the procedure of sanctioning loan surety to Solyndra, shows how state interferences can result in disastrous consequences. Administrations should let corporate establishments to pursue a solution to their miseries and intercede as a lender of last resort. Executives in the modern commercial settings have to employ participatory administration and innovativeness in confronting the developing trials owing to rivalry instead of resulting to gimmick and unprincipled resolutions. Had Solyndra executives reflected on these administrative aspects, imaginably they would have rescued the corporation from bankruptcy. Also, the troublingly close connection between the innermost executive circle, crusade donors, and stakeholders presented a clash of interest that was disturbing to anybody that surveyed the Solyndra incident.