Tuesday, August 30, 2011

Wasting Money: Green Jobs Pipe Dream Update

Some of this we have covered before on the radio show and here at WMD. However, the points need to be re-emphasized. This president has no clue. He talked about the coming Green economy. Spain tried it, failed. And all of Obama's spending has just been to line the pockets of supporters and cronies. All the green economy leads to is bankruptcy. First, from Fox News:
A green jobs program in one of America's greenest cities is being called a bust 16 months after a $20 million federal grant to weatherize homes in Seattle ended up putting just 14 people to work in mostly administrative jobs and upgrading only three homes in the area.

"The jobs are not there," Todd Myers, who wrote the book "Eco Fads," told Fox News. "So we're training people for jobs that don't exist."

Seattle is not alone. The Department of Energy has allocated $508 million to 41 states for its Better Buildings Neighborhood Program and 600 jobs have been created or retained.

"While communities are advancing their programs at different rates, we are pleased with the progress," the agency wrote in a recent statement.

One year into the three-year program, 9,000 homes have had energy audits and received some kind of upgrade. The goal is to weatherize 150,000 homes by 2013 and save consumers $65 million annually on energy bills.

But Myers and others say the biggest problem with the program is government is trying to create a market that consumers don't want. The average homeowner in the U.S. pays about $2,000 a year for energy.

The weatherization upgrades are aimed at saving 15 percent on energy consumption. If the retrofit costs $10,000 even with all the government incentives, it will take over 30 years to pay off through lower energy bills.

"The problem is the policies the politicians choose, whether green jobs or retrofits, are based on appearance," Myers said. "They choose things that look good, rather than what's best for the environment."

Among the other cities having trouble fulfilling the green jobs promise are Toledo, Kansas City and Phoenix. So far, those cities have created a combined 72 jobs with $65 million in grants.

The difficulty is magnified on the federal level. President Obama once said he wanted to create 5 million green jobs over 10 years. The 2009 stimulus package included $5 billion toward that goal.

A chunk of that money went for weatherization programs, but according to a Department of Energy inspector general report one year later, "only two of the 10 highest-funded recipients completed more than 2 percent of planned units."

Pleased with progress that only 3 homes are done, and that the only jobs created are 14 admin jobs. Sounds like a typical elitist liberal agency. But wait, there is more evidence of the green jobs/global warming scam:
Failed Policy: The Obama administration's jobs plan was based on a greening of the economy. But the green jobs aren't materializing, a fact driven home by the recent bankruptcy of a solar power company.

During the 2008 campaign, candidate Barack Obama said he would create 5 million well-paying "green" jobs within 10 years.

Politico has reported that "he's spent considerable time since entering the White House trying to make that happen."

Indeed he has, though there has been no payoff. Yet he refuses give up on his quixotic quest. Last week Obama toured to much fanfare a Johnson Controls plant in Michigan where $300 million in conservation grants produced 150 jobs — at a cost of $2 million per position.

Stimulus funds intended to boost the green economy haven't been well spent. The latest example of this is Monday's bankruptcy filing by Evergreen Solar Inc.

The Massachusetts company that the White House once said "is hoping to hire 90 to 100 people" thanks to stimulus money has $485.6 million in debt. Evergreen closed a factory in March, reports the Boston Herald, and cut 800 jobs. A Michigan plant is to be shut down, as well, causing the loss of even more jobs.

Evergreen isn't the only supposed conservation company that can't make it even when fronted with piles of taxpayer money. Green Vehicles of Salinas, Calif., which has burned through more than $500,000 in money "invested" by the city, folded last month without having produced anything of significance. The company promised it would employ about 70 and pay back Salinas taxpayers with $700,000 a year in city taxes.
The sad part is that Evergreen had been failing for years, but in order to look like doing the right thing while throwing money into a black hole, Obama ignored what experts were saying:
Evergreen Solar, a public company specializing in solar energy, has filed for bankruptcy.

Enthusiasm for alternative energy seems to wax and wane in the U.S., but the financial health of Evergreen has been consistently waning for some time. Falling prices and competition with manufacturers based in China have pushed this company to the brink.

Closure of the company’s plant in Devens, Massachusetts, and the elimination of 800 jobs, represented a belated effort to bring down costs by shifting more production to China. The company received a “going concern” warning by its auditor in the spring. In the end the cash burn at Evergreen outran efforts by management to fix the cost structure.

A quick analysis of LTM financials paints a picture of a highly levered ($395.8 million in long-term debt as of the last quarterly filing) company with unsustainably low levels of profitability and working capital trends moving in the wrong direction. The highlights:

Sales of $295.6 million, with a gross margin of -28.2%
Operating margin of -163.5%, EBITDA margin of -45.9%
DSO of 135.8 (up from 57.8)
DIO of 111.2 (up from 55.3)

Given the financial performance of this company, the surprise it not that it filed for bankruptcy, the surprise is that it took so long to come to that obvious conclusion.