A large majority of geeks are enamored with nuclear power -- it's very cool technology after all. The problem of course, is that a nuclear power plant is a complex piece of machinery and successfully building one to operate safely is a delicate task, a lesson Toshiba learned the hard way:
Those troubled projects in the American South are now threatening the Japanese icon's foundations. The value of Toshiba shares has been cut in half over the last six weeks, wiping out more than $7 billion in market value.
It appears a huge part of the problem stems from reliance on a pipe supplier. James Bernhard Jr. bought a pipe fabrication business ("Shaw") for $50k in a bankruptcy deal and then used his awesome dealmaking ability to parlay that into becoming Toshiba's plumber. Of course, in the modern world being a great businessman means sucking money down like a frat boy at a keg, and Bernhard went on to sell Shaw for $3.3 billion even while screwing up all the pipes (from TFA linked above):
After Westinghouse hired Shaw to handle construction in 2008, it wasn't long before the company's work came under scrutiny. By early 2012, NRC inspectors found steel in the foundation of one reactor had been installed improperly. A 300-ton reactor vessel nearly fell off a rail car. The wrong welds were used on nuclear modules and had to be redone. Shaw "clearly lacked experience in the nuclear power industry and was not prepared for the rigor and attention to detail required,'' Bill Jacobs, who had been selected as the state's monitor for the project, told the Georgia Public Service Commission in late 2012.
So there you have it. The reason some geeks (me for example) oppose nuclear power has nothing to do with the technology, and absolutely everything to do with the morons who run it. Businessmen being in charge of this technology means it will never achieve its potential and that it will always be dangerous, because by the time something goes wrong, they'll be spending their billions on hookers and blow in some remote private tropical island paradise, far far away from any consequences of any kind.
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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
Toshiba has reported another huge loss as it continues to try to recover from the bankruptcy of its Westinghouse nuclear unit:
Toshiba has filed its delayed financial results, warning that the company's survival is at risk. "There are material events and conditions that raise substantial doubt about the company's ability to continue as a going concern," the company said in a statement.
The electronics-to-construction giant reported a loss of 532bn yen (£3.8bn; $4.8bn) for April to December. However, the results have not been approved by the firm's auditors. These latest financial results have already been delayed twice and raise the possibility that Toshiba could be delisted from the Tokyo Stock Exchange.
Previously: Toshiba Nuked Half its Assets
Huge Nuclear Cost Overruns Push Toshiba's Westinghouse Into Bankruptcy
A joint bid by the U.S. company Broadcom Limited and the Japanese government may keep Toshiba's chip business out of the hands of China or South Korea:
A Japanese government-backed fund and policy bank are considering a joint bid with Broadcom Ltd for Toshiba Corp's semiconductor business, a move that would vault the U.S. chipmaker into the lead to buy the prized unit, the Asahi newspaper said on Wednesday.
A bid by Innovation Network Corp of Japan and the Development Bank of Japan with Broadcom would appear to be aimed at preventing Toshiba's chip technology from going to rivals in China or South Korea, the Asahi said, citing an unidentified source.
INCJ Chairman Toshiyuki Shiga said on Tuesday the fund was looking at the chip auction although it had not participated in the first round of bidding. People familiar with the matter have told Reuters INCJ might invest in the business as a minority partner - a move that would help the government prevent a sale to bidders it deems risky to national security.
Previously: Toshiba and SanDisk Announce 48-Layer 256 Gb 3D NAND
Toshiba in Trouble
Toshiba Teasing QLC 3D NAND and TSV for More Layers
Toshiba Envisions a 100 TB QLC SSD in the "Near Future"
Toshiba Considers NAND Business Split; Samsung Delays Release of 4 TB SSDs (WD is a bidder)
SK Hynix to Bid for Toshiba's Memory Business
Toshiba Nuked Half its Assets
Huge Nuclear Cost Overruns Push Toshiba's Westinghouse Into Bankruptcy
Toshiba Warns That its Survival is at Risk
(Score: 4, Funny) by c0lo on Tuesday February 14 2017, @10:19AM
An excellent example of govt red-tape - how dare they impose on professionals at Shaw what is a right or a wrong weld?
(large grin)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by turgid on Tuesday February 14 2017, @10:27AM
"This place ain't gonna last forever. I've seen the welds. You wiv me?" -- TWI tutor teaching us about visual inspection of welds at the nuclear power station I once worked at.
I refuse to engage in a battle of wits with an unarmed opponent [wikipedia.org].
(Score: 2) by c0lo on Tuesday February 14 2017, @10:33AM
Just from curiosity, did it last?
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 3, Interesting) by turgid on Tuesday February 14 2017, @10:41AM
It was built with the intention of lasting 25 years. They got 40 out of it, completely safely. Technically it could have easily gone on to 45 or maybe 50. It was a Magnox, designed in the 1950s and commissioned in the early 60s, built like a brick outhouse. The limiting factor for the life of the reactors was Wigner energy build-up in the graphite moderator combined with erosion IIRC.
A well-run nuclear power station is a very boring place :-) I got very bored and left after nearly five years.
I wish we built software the way the British built nuclear power stations...
I refuse to engage in a battle of wits with an unarmed opponent [wikipedia.org].
(Score: 3, Funny) by FatPhil on Tuesday February 14 2017, @12:08PM
Whaaaaat?!??!??
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by turgid on Tuesday February 14 2017, @01:24PM
It was significantly better designed than the Windscale Piles. They were designed in a hurry to make plutonium for nuclear bombs. Ours were designed for generating electricity safely. I was nervous too at first :-)
I refuse to engage in a battle of wits with an unarmed opponent [wikipedia.org].
(Score: 5, Insightful) by JoeMerchant on Tuesday February 14 2017, @01:51PM
I was just going to say: Nuclear Power is just incompatible with our current level of business regulation. We're not responsible enough to handle it on the money side - we've got the technical chops, we make it work in the military, but the free market can't handle the ROI horizon.
🌻🌻 [google.com]
(Score: 1) by khallow on Tuesday February 14 2017, @01:54PM
but the free market
Free markets have nothing to do with nuclear power.
(Score: 5, Insightful) by turgid on Tuesday February 14 2017, @01:57PM
Correct. Free Markets work on a quarterly basis. A nuclear power plant needs to be designed, constructed, operated and decommissioned on a 100 year time scale. Only Public management and funding makes sense.
I refuse to engage in a battle of wits with an unarmed opponent [wikipedia.org].
(Score: 1, Insightful) by khallow on Tuesday February 14 2017, @02:22PM
Correct. Free Markets work on a quarterly basis. A nuclear power plant needs to be designed, constructed, operated and decommissioned on a 100 year time scale. Only Public management and funding makes sense.
No, that has nothing to do with free markets which are merely very low regulation markets (completely absent in the nuclear power world). And I'll note here that a key reason "quarterly basis" thinking works at all is because of government "too big to fail" bailouts and government policies like Keynesian spending which eliminate a fair bit of business risk - both greatly reduce risk that would otherwise trip up short term thinkers.
Free markets are one of those things that are criticized when they are deliberately broken badly. Kind of like complaining that the car doesn't handle well when you remove an axle.
(Score: 2) by turgid on Tuesday February 14 2017, @02:28PM
Point missed completely. If you subject your nuclear power station to "Free Market" forces, how can you guarantee that you're going to be profitable next quarter, let alone over the many decades that the plant will exist?
I refuse to engage in a battle of wits with an unarmed opponent [wikipedia.org].
(Score: 2) by Scruffy Beard 2 on Tuesday February 14 2017, @04:00PM
According to market theory, capital costs (barriers to entry) do not exist.
More fundamentally, the price system ignores externalities. That is why you need governments imposing things like carbon taxes.
(Score: 1) by khallow on Wednesday February 15 2017, @03:52AM
According to market theory, capital costs (barriers to entry) do not exist.
Sounds like a pretty solid reason to decide that "market theory" doesn't fully apply then.
More fundamentally, the price system ignores externalities. That is why you need governments imposing things like carbon taxes.
I agree. But governments aren't particularly good at deciding what the externalities are either.
(Score: 2) by c0lo on Tuesday February 14 2017, @02:07PM
Aaaahhhh, I'm relieved.
Better stay this way.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by JoeMerchant on Tuesday February 14 2017, @07:18PM
From the story, Westinghouse hired Shaw, a contractor in a free market. Presumably they contracted with this clown based on price, it certainly wasn't his qualifications and experience.
🌻🌻 [google.com]
(Score: 1) by khallow on Wednesday February 15 2017, @01:33AM
From the story, Westinghouse hired Shaw, a contractor in a free market. Presumably they contracted with this clown based on price, it certainly wasn't his qualifications and experience.
Two things: first, "free market" means something, but it doesn't mean the heavily regulated market of nuclear industry contracting. Second, the Shaw business was twenty years old with an even older business incorporated in. While I agree in reality that it didn't have what was needed, on paper it did (that is what "qualification" is after all). Someone screwed up and now several businesses will pay for that failure. So here we see the strengths of both market and regulation approaches. Poor quality construction doesn't find its way into a running nuclear reactor and the cost of the screwups are contained to the parties responsible for the screwups.
(Score: 5, Insightful) by Geezer on Tuesday February 14 2017, @10:22AM
TFS pretty much nails it. Once upon a time Bechtel, Westinghouse (at least the Bettis Group), G.E., and Combustion Engineering, and the other big nuke outfits were tech companies run by engineers and managers with engineering familiarity. Now it's just like any other business: MBA's and con artists "maximizing shareholder value" for the next quarterly earnings report.
Disclaimer: 8 years in naval nuclear propulsion does not make me an expert, just an informed observer.
(Score: 5, Insightful) by schad on Tuesday February 14 2017, @01:56PM
I know that we tend to be engineers on this site, and so we look on them fondly, but "the CEO is an engineer!" is not exactly a recipe for success or moral clarity. I mean, many (most?) pharma companies are either run by an M.D. or have one very far up in the food chain. But you wouldn't exactly hold them up as models of quality corporate governance.
I'd say the real problem is that these companies stopped actually making the things they are selling, and instead turned themselves into general contractors. There's not necessarily anything wrong with that. But it's completely unlike being an industrial manufacturing company, and requires entirely different skill- and mind-sets. So when you see these companies which have spent the last 100 years doing industrial manufacturing -- and also a little bit of design work here and there -- suddenly try to "pivot" into general contracting work, it's always a disaster. Look at Boeing and the Dreamliner. They're having exactly the same sorts of problems as Toshiba, and it's because they're outsourcing most of their supply chain. So they have problems with quality control, they (and their contractors) have problems with shortages, they have problems shipping things around to where they need to be. Suppliers complain that they don't know what the parts they're making are going to be used for, so they can't tell if they're any good or not. Workers complain that parts arrive all out of order (which is a big deal when a "part" might be a mostly-assembled airplane fuselage that can't just be set in a corner until you're ready for it). Shippers complain that no thought was given to how to get parts from A to B.
All of these problems can be solved, with enough time and practice. The auto manufacturers have mostly got it all sorted out by now. Boeing is having a harder time because they're a much lower-volume business. And I think nuke companies will have a harder time still because every single power plant is custom-built. And all the assembly -- and even some of the fabrication -- has to be done on-site, unlike with planes and cars. It's hard to see how they'll ever be able to get enough generalizable experience to make the process go any smoother in future efforts. I really think they may have no option but to bring basically the entire operation back in-house again, and focus their "contracting" efforts on logistics instead (a vastly easier problem).
Remember, we've actually built a whole lot of incredibly safe nuclear reactors. And they were built by ruthless profit-seeking corporations. Probably with less government oversight, too. I'm not advocating for a return to those days. I'm just pointing out that "for-profit" and "light regulatory burden" do not inevitably lead to meltdowns. Just as "non-profit" and "extensive oversight" do not inevitably lead to safety.
(Score: 2) by c0lo on Tuesday February 14 2017, @02:12PM
Oh, so many words to say: engineers (as CEO or not) and engineering are necessary but not sufficient to run a successful business
Same apply to economists.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 4, Interesting) by Geezer on Tuesday February 14 2017, @02:21PM
The only incredibly safe nuclear reactors I have direct personal experience with (Westinghouse A2W and C1W) were built and maintained with an enormous amount of government oversight (military: NavSea Code 08, civilian: AEC/NRC), ruthless profit-seeking notwithstanding. However, these were military projects overseen by one of the most demanding engineers who ever slid a slide rule, Hyman Rickover.
I do agree that the more generalized trend in large "manufacturing" enterprises toward out-sourcing everything but the profits has unfortunate effects on the quality of the end product as you describe, and an obfuscated accountability chain that makes liability enforcement a real challenge.
(Score: 4, Interesting) by linkdude64 on Tuesday February 14 2017, @07:16PM
A highly relevant quote on the topic from the man himself.
https://en.wikipedia.org/wiki/Hyman_G._Rickover#Three_Mile_Island [wikipedia.org]
(Score: 2) by Thexalon on Tuesday February 14 2017, @02:58PM
Moral clarity? Since when do morals and large-scale business have anything at all to do with each other? Businesses exist to make money. Period. They're fundamentally amoral structures. That's one reason sociopaths are disproportionately likely to end up running them.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by hemocyanin on Tuesday February 14 2017, @10:25PM
That's how they are currently set up to run, but it is a fundamental law of nature that requires it to be thus. Simply changing corporation law making it clear that profit seeking takes back seat to being a good member of the community in certain definable ways, backed up by decade long prison terms, would change that.
(Score: 4, Insightful) by tibman on Tuesday February 14 2017, @03:00PM
The outsourcing thing has always been interesting to me. If our crew can do the job for X and outsourced can do it for X/2 then either the outsource is paid less, delivers less (quality), or is more efficient. None of those are good reasons to outsource. If their process is better then don't outsource to them. Learn their process and improve ours. If they are delivering less quality then obviously we don't want the outsource. If their team is paid less it could be a several things. Lower cost of living is acceptable and is actually a valid reason to outsource. If they are paid less because they are less experienced then we shouldn't outsource.
It's interesting to me because business sees things differently. Cheaper is better even if it means firing the local team and not waiting for them to learn a better process. Cheaper is better, even if quality slips. Cheaper is better even if it is providing experience to potential competitors and gutting our experienced team.
Personal investment in your company is a thing too. A contractor doesn't give a crap about your company. Local employees might care though.
SN won't survive on lurkers alone. Write comments.
(Score: 3, Insightful) by pTamok on Tuesday February 14 2017, @11:09AM
As long as you have independent inspection and a properly run quality control process where the people doing the quality inspection are not employed by the company delivering the product, and cannot come under influence in other ways, then the risk of shoddy workmanship causing a problem is decreased. As Elon Musk found out, trusting your suppliers when their product is critical to your enterprise is something you do very, very carefully.
One of the reasons building a nuclear power station is so expensive is that the quality control regime is somewhat more arduous (and therefore expensive) than normal construction. With proper contracts, supplying pipework that does not pass QC should be supplier's problem, not the customer's.
It looks like Toshiba didn't due sufficient due diligence before buying the companies providing sub-standard components. Which is a learning point for people studying mergers and acquisitions.
(Score: 2) by HiThere on Tuesday February 14 2017, @08:17PM
Toshiba didn't do the work or buy the work, Toshiba hired Westinghouse to do the work, and Westinghouse subcontracted to someone who didn't know or didn't care. Possibly both.
Once upon a time Westinghouse had a good name, but after this, *I* think that they should need to pay the bills to fix/replace&decommission the reactors...and that they shouldn't be allowed to do the work themselves, as they have demonstrated incompetence.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 3, Informative) by hemocyanin on Tuesday February 14 2017, @10:29PM
Actually, Westinghouse is a subsidiary of Toshiba. From TFA:
(Score: 2) by HiThere on Wednesday February 15 2017, @01:01AM
Yeah, I found out that after I'd posted. So it makes a lot of sense that Toshiba should end up holding the bag...but somehow I still wish that the costs could be more directly laid at the foot of Westinghouse. And in particular of their C level executives.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 5, Insightful) by iamjacksusername on Tuesday February 14 2017, @01:46PM
I had the opposite take-away; it sounds to me like the process worked. A dodgy contractor tried to pull a fast one and the regulators caught it. Now, Toshiba is eating the cost to fix the problem. This is a normal part of the business. The reactor will be built, it will comply with NRC standards and it will be safe. However, the process to get there is not a straightline and never will be.
I have worked for engineers and architects for most of my career; there is a give-and-take to getting anything of any size built. There are always impossible deadlines, less-than ideal fixes due to constrained budgets and, of course, shady contractors. This will be true no matter if you are building a house, an office or a nuclear reactor. The idea that we just cannot build something because the contractors will be shady is ridiculous on its face. If that was true, we should all just stop striving and go back to running after gazelles on the African plains. I'm sure people said the same thing when the first skyscraper went up in Lower Manhattan or the first suspension bridge. Humans will find away; western civilization is a living monument to that fact.
(Score: 2) by Murdoc on Wednesday February 15 2017, @12:51AM
The idea that we just cannot build something because the contractors will be shady is ridiculous on its face. If that was true, we should all just stop striving and go back to running after gazelles on the African plains.
I think that is oversimplifying it a bit. It's more like this: As technology and the economy advances (and becomes more deregulated), it becomes more dangerous to leave things in the hands of people who's main priority does not include things like public safety, and thus accidents will increase in both frequency and magnitude. So that is the reason I see for increasing caution regarding things like this. Some think that we can fix it with sufficient regulation, others think that something more needs to be done (like me). But either way we can't just leave things as they are they way they are going.
(Score: 3, Insightful) by khallow on Tuesday February 14 2017, @01:53PM
So there you have it. The reason some geeks (me for example) oppose nuclear power has nothing to do with the technology, and absolutely everything to do with the morons who run it. Businessmen being in charge of this technology means it will never achieve its potential and that it will always be dangerous, because by the time something goes wrong, they'll be spending their billions on hookers and blow in some remote private tropical island paradise, far far away from any consequences of any kind.
And let us note that when something went wrong here, a company at fault lost a huge amount of assets. No meltdowns or other major nuclear drama. Sounds like the system works to me.
(Score: 5, Touché) by nitehawk214 on Tuesday February 14 2017, @05:35PM
Lets keep that last paragraph in the comments and not in the article summary.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 2) by Murdoc on Wednesday February 15 2017, @01:04AM
So there you have it. The reason some geeks (me for example) oppose nuclear power has nothing to do with the technology, and absolutely everything to do with the morons who run it. Businessmen being in charge of this technology means it will never achieve its potential and that it will always be dangerous, because by the time something goes wrong, they'll be spending their billions on hookers and blow in some remote private tropical island paradise, far far away from any consequences of any kind.
Ok, now I get it. Thanks! I've always thought that anti-nuclear people were just misinformed (and there are probably many who still are), but now I find that at least some have the same position I do on numerous other technologies: nanotech, genetic engineering, etc. I usually don't say much about it but I feel like I must look like a luddite to others I do (or would) talk to, and as a technology geek I hate feeling this way, not being able to get excited about fancy new technology for the fear of what the businesspeople and even some politicians might do with it. We have plenty of real world instances to show that technology will be abused, and as it gets more sophisticated it will be harder for people to understand the issues surrounding them, and thus easier for them to be abused. I mean, look at the current privacy and net neutrality issues, so many people don't care because they don't have a clue. Business can only be reigned in by regulation, which requires the government, which is democratic (ostensibly), and a democracy can only operate when the people are properly informed. How can they be properly informed when technology is getting more numerous and more advanced all the time? Most don't even want to understand. So yeah, the politicians are taking advantage of that, how can you expect them not to? And we certainly have plenty of sci-fi to inform us as to the possible ways these technologies can be abused as well. So yeah, I'm scared of the future and what it holds.
(Score: 1, Interesting) by Anonymous Coward on Wednesday February 15 2017, @02:55AM
https://en.wikipedia.org/wiki/Olkiluoto_Nuclear_Power_Plant#Unit_3 [wikipedia.org]
It's a new Finnish nuke plant built by the French Areva and to make an understatement there have been issues. To give scale of the trouble, the date of having a working plant has been postponed no less than 8 times from 2009 to the current 2018 and now the partners are suing each other for the delays and costs in billions exceeding the original evaluation by around 200%.
Sounds like nuclear plants are like the (supposed) moon shot, something we used to be able to pull off but now even the shuttle is grounded...
(Score: 0) by Anonymous Coward on Wednesday February 15 2017, @12:30PM
Scientists and engineers have to be in charge of the robots and skilled tradesmen, tradespeople, building reactors, managerial or business or political interference will result in explosions, doubling of the price, or both. Remember Challenger.