Westinghouse Electric Company, a nuclear power developer based in the United States, filed for bankruptcy on Wednesday. The company is struggling to account for its failed nuclear production projects while its main corporate partner, the Japanese parent Toshiba Corp, is suffering huge losses.
Westinghouse, “a once-proud name that in years past symbolized America’s supremacy in nuclear power, now illustrates its problems”. The company is now able to break its contracts after filing for bankruptcy. Due to the unfinished projects, Toshiba estimates total losses of up to $9 billion, which could hit Japan’s economy hard. This is one of the biggest annual losses that any Japanese company has ever seen.
As a global nuclear technology leader, Westinghouse is determined to develop a reorganization plan and get back on track with its projects. However, the crippling cost overruns will make it hard to do so. Companies worldwide that had contracts with Westinghouse, have stepped up their efforts to lay off rising liabilities to account for further financial losses.
The downfall of Westinghouse is a blow for the nuclear power industry worldwide. Other energy resources have been on the rise, as more companies take on renewable energy projects which are starting to become much more affordable. This has contributed to the slowdown of the nuclear power industry, with Westinghouse's bankruptcy declaration underscoring the industry's current problems.
Japan also fears that the collapse of Westinghouse will lead to an increase in U.S. taxes due to the impact it will have on local jobs and finances for the two nuclear power plants in South Carolina and Georgia. As a result, the U.S. and Japanese government have been working together to discuss how to proceed with the upcoming challenges they will face.