Obama does not regret betting on Solyndra
In an interview, Obama says loan guarantees to energy technology companies like Solyndra are necessary to compete internationally and support U.S. manufacturing.
President Obama said today he does not regret the loan-guarantee Solyndra received, while recently revealed e-mails show early doubts within the White House about the now-famous solar company.
In an interview with ABC News and Yahoo News, Obama said the policy of providing loan guarantees to clean-energy technology companies is sound despite the failure of Solyndra, which filed for bankruptcy at the end of August. The company received a $535 million loan guarantee and about $1 billion in private capital.
Obama said loan guarantee program is important to developing clean-energy technologies and demonstrating that that U.S. can be an exporter of manufactured goods, rather than only an importer.
"If you look at the overall portfolio of loan guarantees that have been provided, overall it's doing well," Obama said. "What we always understood is that not every single business is going to succeed in clean energy. But if we want to compete with China which is pouring hundreds of billions of dollars into this space, if we want to compete with other countries that are heavily subsidizing the industries of the future, we have to make sure that our guys here in the United states of America at least have a shot. Now there are going to be some failures and Solyndra is an example."
Also today, Democratic members of the House Committee on Energy and Commerce released a summary of e-mails garnered during an investigation around Solyndra. The documents were published to indicate that no were no signs of "political favoritism" around Solyndra. (Click for PDF.)
But some of the exchanges make clear that members of the White House and the Office of Management and Budget were well aware of both the financial and political risks surrounding the solar company, even before Obama visited in May 2010. Solyndra was the first company to receive a loan guarantee in a program that was created in 2007.
"The reality is that if POTUS visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012--but that to me is the reality of saying that we want to help promote cutting edge, new economy industries," wrote one OMB official.
One exchange shows that even a venture capital investor in Solyndra thought the loan guarantee program is fraught with business risks.
"The allocation of spending to clean energy is haphazard; the government is just not well equipped to decide which companies should get the money and how much...One of our solar companies with revenues of less than $100 million (and not yet profitable) received a government loan of $580 million; while that is good for us, I can't imagine it's a good way for the government to use taxpayer money," wrote Brad Jones of Redpoint Ventures to Lawrence Summers, director of the National Economic Council.
Related stories
• Solyndra was a disaster waiting to happen
• Solyndra's demise: Setting the record straight
• Why solar start-ups need Uncle Sam
In response, Summers said: "I relate well to your view that gov [government] is a crappy vc [venture capitalist] and if u were closer to it you'd feel more strongly. But suppose we think there are all kinds of externalities to renewable investments. What should we do?"
In the ABC News interview, Obama was reminded that there were warning signs at the OMB regarding Solyndra, which had to cancel a planned IPO in June 2010. He said: "Hindset is always 20/20. It went through the regular review process and people felt that this was a good bet. But the fact of matter is if we don't get behind clean energy, if don't get behind advanced battery manufacturing, if we're not the ones creating the cars of the future, then we are not going to be able to make stuff here in the United States of America."