Friday, January 20, 2012

Creative destruction at Solyndra?

Well, it's actually not very creative. A CBS affiliate in San Francisco caught Solyndra employees destroying hundreds of thousands of custom-made glass tubes. According to the report, Solyndra paid some $8 million for the tubes to a company it still owes money to.

So what gives? Apparently, the court overseeing the bankruptcy allowed this destruction because the cost of storing the tubes exceeds their value. The company selling off Solyndra's assets--Heritage Global Partners--supposedly looked for buyers, but couldn't find any.


Yet, the CBS reporters had no trouble finding someone willing to buy the tubes and trouble finding someone who would happily take some of the tubes off Solyndra's hands to donate to a university for research projects. After all, custom-made glass tubing inn't cheap and no matter the specifications, there is bound to be some other uses for this stuff.

Now, I doubt this story will have much of an impact on national politics, but here's the thing: it points out how very different approaches can be, when it comes to a failing company. Solyndra is gone, it's bankrupt, an abject failure. The company charged with selling off its assets is obviously looking for the easy sell. And because of that, there is useless waste, pointless destruction.

Perhaps if Bain Capital--or a similar firm--had gotten hold of Solyndra just before bankruptcy, things would be different, assets would have been properly managed and used to deliver every possible bit of return that was available. Of course, then people would have been outraged over the needless destruction engaged in by Bain Capital, the way in which it destroyed a company that could possibly have been saved.

The destruction of these tubes? Meh. It'll be chalked up as an "unpleasant necessity"...

Cheers, all.

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