Toshiba CEO signals Westinghouse Nuclear is worthless, offers option to pay for sale of company
March 15, 2017
admin

Nuclear power is and always will be really risky business. And to confirm that, the Toshiba–Westinghouse Nuclear crisis is widening and bankruptcy looms large.

Reuters reports Toshiba is “actively considering” a host of desperate financial actions to shore up against the approaching financial tsunami with the writedown of $6.3 billion in losses for nuke projects bogging down deeper and deeper in South Carolina and Georgia. The V.C. Summer Units 2 and 3 and Vogtle Units 3 and 4 continue to fall further behind scheduled completion with still out-of-control construction costs. The corporate emergency actions now include paying another nuclear corporation to take on the majority of  share of its 2006 acquisition in Westinghouse Electric and  to financially “rehabilitate” the parent company by selling at least 50% of its holdings in its lucrative micro-memory chip business, NAND.

CEO Satoshi Tsunakawa went public to protect Toshiba from collapse of its Westinghouse Nuclear Division indicating that the “sale” option might actually be Toshiba offering to pay another nuclear corporation to take on a majority share. Korea Electric Power Corporation is being cited as the only likely player.  

In a wave of sell offs, Toshiba management has further announced it is considering the loss of ownership control of its global NAND business in semiconductor flash memory systems for computer servers, mobile devices, car navigation and more. Toshiba has been the leader and innovator in the semiconductor industry since 1984.

Toshiba has repeatedly postponed the announcement of its 3rd Quarter 2016 (April to December) Westinghouse losses. Those results were first due out on February 14, 2017 then pushed off to March 14, 2017. The announcement is now further delayed until April 11, 2017. The current delay is blamed on Toshiba’s failure to obtain an independent audit investigating “inappropriate pressure by certain senior managers” including former Westinghouse executive Danny Roderick who allegedly pressed hard to have  the Summer and Vogtle project losses understated. Additional accounting is also being required of Toshiba’s failing Stone & Webster nuclear construction business for those same projects. CEO Satoshi Tsunakawa's plan to protect Toshiba as parent company by selling off the majority share of its failing Westinghouse Nuclear Division increasingly appears more like offering free tickets to a tar pit party.  

Both the NAND and nuclear power operations are strategically important to Japan. Hence, the Abe government has entered into the negotiations.   

Moveover, back here in the United States, the Toshiba-Westinghouse debacle threatens a financial earthquake under the $8.3 billion federal nuclear loan guarantee that the U.S. Department of Energy put up for the two Westinghouse AP-1000 reactors still under construction at Georgia’s Vogtle nuclear power station. A bankruptcy puts U.S. taxpayers at risk for picking up much if not most of the cost of a default. The Vogtle loss with a Westinghouse bankruptcy could be up to 15 times more taxpayer money than was lost in the Solyndra solar loan guarantee default.

Update on March 18, 2017 by Registered Commenteradmin

The Abe government is positioning a bailout to Toshiba with an investment to keep the NAND microchip business.

Toshiba has announced that it might sell controlling interest in NAND to pay for Westinghouse Electric losses sustained in more than $6 billion for over-budget and behind schedule nuclear power construction projects in South Carolina and Georgia. While Westinghouse is not mentioned as receiving any Japanese government support, Japan might be a backer for Toshiba's announcement that it would pay somebody to take the nearly bankrupted Westinghouse nuclear division. 

http://www.japantimes.co.jp/news/2017/03/17/business/corporate-business/japan-may-inject-public-money-turn-around-toshiba-sources/#.WMySmYWcGUk

Update on March 21, 2017 by Registered Commenteradmin

Moody's Investor Services warning South Carolina utility SCANA that the construction of the two Toshiba/Westinghouse AP100 reactors at V.C. Summer is increasingly perilous to SCANA credit rating.

Moody's sent this warning out in a special report in the mid-2000 with the industry's  first announcements of the so-called "nuclear renaissance." SCANA was one that paid no heed and waded into the financial disaster.
https://www.bloomberg.com/news/articles/2017-03-20/toshiba-nuclear-woes-has-moody-s-warning-of-scana-credit-risks

Article originally appeared on Beyond Nuclear (http://www.beyondnuclear.org/).
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