James Conca , | Contributor
Westinghouse Bankruptcy Shakes The Nuclear World
On Wednesday, Westinghouse Electric Company filed for Chapter 11 Bankruptcy in New York to restructure itself as a result of costly problems at the AP1000 power plants it’s building in Georgia and South Carolina.
Westinghouse has obtained $800 million in debtor-in-possession financing from a third-party lender to help fund and protect its core businesses during this reorganization.
Its Japanese parent company, Toshiba, declared that its nuclear power business has already lost $6 billion, which could go up to $10 billion, and is seeking ways to limit its liability. Toshiba shares have lost over $7 billion in market value this fiscal year.
Westinghouse selected the Shaw Group, led by James Bernhard Jr., to spearhead construction. Bernhard, a wheeler and dealer, ../
In the meantime, Westinghouse turned to a real nuclear construction contractor, Fluor Corporation, to get the nuclear plants back on track, but it is too early to tell how successful they will be. Even with the cost overruns and delays, these reactors should get completed and they should still have lower life-cycle costs than renewables or new coal.
It’s unclear to this simple laymen why they originally would have gone with the nuke-upstart Shaw Group? A big company like Westinghouse and Toshiba…like shouldn’t they have seen this coming? On the other hand Fluor — a company even I worked under a short time — is an old standard, and dependable.
Why did it take them so long, and make it so costly, to turn to them? Just seems they were out to cut corners(costs) from the beginning and got burned. What else explains it? Plus some inner-industry ego rivalry. Now they’ll pay for their errors.
But then the way media were starting to report the story as if Westinghouse was finished. And likely it will be spun into an anti-nuclear power story, which it is not if you read this report. In fact, nuclear energy should be enjoying a resurgence. Thanks Westinghouse-Toshiba [sarcasm], you didn’t do the sector any favors.