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Huge Nuclear Cost Overruns Push Toshiba's Westinghouse Into Bankruptcy

posted by on Friday March 31 2017, @06:13AM   
from the no-more-nukes dept.

takyon and Fnord666 both sent in this story:

Westinghouse Electric Company has filed for bankruptcy:

Westinghouse Electric Co, a unit of Japanese conglomerate Toshiba Corp, filed for bankruptcy on Wednesday, hit by billions of dollars of cost overruns at four nuclear reactors under construction in the U.S. Southeast.

The bankruptcy casts doubt on the future of the first new U.S. nuclear power plants in three decades, which were scheduled to begin producing power as soon as this week, but are now years behind schedule.

The four reactors are part of two projects known as V.C. Summer in South Carolina, which is majority owned by SCANA Corp, and Vogtle in Georgia, which is owned by a group of utilities led by Southern Co.

Costs for the projects have soared due to increased safety demands by U.S. regulators, and also due to significantly higher-than-anticipated costs for labor, equipment and components.

Pittsburgh-based Westinghouse said it hopes to use bankruptcy to isolate and reorganize around its "very profitable" nuclear fuel and power plant servicing businesses from its money-losing construction operation.

Also at Ars Technica and Business Insider.

Toshiba's Westinghouse problems have caused the company to sell off other assets:
Toshiba in Trouble
Toshiba Shares Plunge Ahead of Nuclear Investment Writedown
Toshiba Considers NAND Business Split; Samsung Delays Release of 4 TB SSDs
Toshiba Nuked Half its Assets

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• "Increased Regulation" Boogeyman? Greedy Morons (Score: 5, Informative) by hemocyanin on Friday March 31 2017, @04:26PM

  by hemocyanin (186) on Friday March 31 2017, @04:26PM (#487146) Journal

  They forgot to mention that Toshiba was basically gutted by "smart businessmen" leveraging synergies or whatever:

  https://www.bloomberg.com/news/articles/2017-02-13/toshiba-s-nuclear-reactor-mess-winds-back-to-a-louisiana-swamp [bloomberg.com]

  If you want to understand why Toshiba Corp. is about to report a multi-billion dollar write-down on its nuclear reactor business, the story begins and ends with a one-time pipe manufacturer with roots in the swamp country of Louisiana.

  ***

  To build that mega-project, Westinghouse turned to Shaw, a newcomer to nuclear work. Shaw was founded in 1987 by James Bernhard Jr., who distinguished himself through his deal-making acumen. He got his start paying $50,000 for the assets of a bankrupt pipe fabricator, and grew via one acquisition after another. In 2000, Bernhard swooped in at a bankruptcy auction and, during an 18-hour bidding war, bought Stone & Webster Inc., a once-venerable engineering firm that had already agreed to a deal with a much bigger rival.

  Stone & Webster had built the Massachusetts Institute of Technology’s campus and many of the country’s nuclear plants from the 1950s to the 1970s, but it was a shell of its old self when Bernhard bought it. Still, the name gave Shaw new credibility in the nuclear field, which it capitalized on to win all of Westinghouse’s contracts. “They weren’t necessarily qualified, but they had the heart and the go-get-them to take it on,’’ says Jeffrey Kellerman, a retired construction project controller who worked for Shaw at its nuclear sites.

  ***

  Just as problems began to surface, in July 2012 Shaw agreed to sell itself for $3.3 billion to Chicago Bridge & Iron Co., a much larger engineering firm that wanted in on the envisioned nuclear renaissance. But three years later, with little progress to show for itself, CB&I decided to cut its losses. It sold the bulk of Shaw’s assets to Toshiba for $229 million, accepting the significantly lowered price in exchange for shedding liabilities related to the projects.

  Starting Score:	1		point
  Moderation		+4
  Insightful=1, Interesting=1, Informative=2, Total=4
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  Total Score:		5