|Industry||Nuclear power |
|Predecessor||Westinghouse Electric Corporation|
|Founded||Monroeville, Pennsylvania, U.S. (1999 )|
|George Westinghouse, (corporate namesake; founder of the original Westinghouse (1886)) |
Patrick Fragman, President and Chief Executive Officer
|Owner||Brookfield Business Partners|
Number of employees
Westinghouse Electric Company LLC is an American nuclear power company formed in 1999 from the nuclear power division of the original Westinghouse Electric Corporation. It offers nuclear products and services to utilities internationally, including nuclear fuel, service and maintenance, instrumentation, control and design of nuclear power plants. Westinghouse's world headquarters are located in the Pittsburgh suburb of Cranberry Township, Pennsylvania. Brookfield Business Partners is the majority owner of Westinghouse.
On March 24, 2017, parent company Toshiba announced that Westinghouse Electric Company would file for Chapter 11 bankruptcy because of US$9 billion of losses from nuclear reactor construction projects. The projects responsible for this loss are mostly the construction of four AP1000 reactors at Vogtle in Georgia and the Virgil C. Summer plant in South Carolina. Westinghouse filed for Chapter 11 bankruptcy protection on March 29, 2017. In 2018, Westinghouse was acquired by Brookfield Business Partners and some partners.
For further chronological details, see Westinghouse Electric Corporation § Timeline of company evolution.
Westinghouse Electric Company was formed in 1999 after the original company with that name, George Westinghouse's Westinghouse Electric, founded in 1886, ceased to exist due to a series of divestitures and mergers through the mid-to-late 1990s. These included Westinghouse Electric's purchase of CBS in 1995, expansion into communications and broadcasting, and the selling off of most non-broadcast operations by 1998; renaming itself CBS Corporation. That same year, the Westinghouse Power Generation Business unit was sold to Siemens of Germany. In 1999, CBS Corporation sold its nuclear business (Westinghouse Electric Company) to British Nuclear Fuels Limited (BNFL). and a year later CBS Corporation was merged into Viacom (1971-2005), thus putting an end to the original Westinghouse. (Legally, Westinghouse Electric Corporation still exists, mainly for the purpose of licensing, as a subsidiary of CBS Corp.)
In July 2005, BNFL confirmed it planned to sell Westinghouse, then estimated to be worth $2 billion. This attracted interest from several companies, including Toshiba, General Electric and Mitsubishi Heavy Industries. When the Financial Times reported on January 23, 2006 that Toshiba had won the bid, it valued the company's offer at $5bn (£2.8bn). On February 6, 2006 Toshiba confirmed it was buying Westinghouse Electric Company for $5.4bn and announced it would sell a minority stake to investors. The sale surprised many industry experts who questioned the wisdom of BNFL selling one of the world's largest producers of nuclear reactors shortly before the market for nuclear power was expected to grow substantially; China, the United States and the United Kingdom were all expected to invest heavily in nuclear power. After the 2005 Indo-US nuclear deal, there was also hope that India's plan of massive investment in nuclear plants would help to revive the U.S. nuclear power industry. Reasons in favor of a sale were: The commercial risk of the company's business in Asia may have been too high for a company then owned by taxpayers; if Westinghouse won the bid for any new nuclear stations in a UK competition, questions may be raised of favoritism, but if it lost, it might have been seen as a lack of faith in its own technology. Finally, the record of UK governments building nuclear plants had been a commercial disaster.
On October 16, 2006 the acquisition of Westinghouse Electric Company for $5.4 billion was completed, with Toshiba obtaining a 77% share, partners The Shaw Group a 20% share and Ishikawajima-Harima Heavy Industries Co. Ltd. a 3% share. On 13 August 2007 Toshiba sold 10% to Kazatomprom, the national uranium company for the Republic of Kazakhstan, for US$540 million, leaving Toshiba with 67%. Kazatomprom's ownership is entirely passive, with no voting or veto rights or presence on the board of directors.
In September, 2011, Toshiba was reported to be in talks to acquire the Shaw stake and both companies confirmed the story soon thereafter. Shaw CEO James Bernhard said[when?], that Toshiba was paying US$1.6 Bn for the Shaw-owned 20% stake, and that it was the 50% rise in the yen on its yen-denominated debt over five years, which had led it to exercise its sale option. Toshiba said in late 2012 it was open to, and considering, having other partners invest in the business. The purchase closed in January 2013, and brought Toshiba's share in the company to 87% as a result of Shaw exercised its option.
After several years of doing business there, Westinghouse decided to move its world headquarters from the Energy Center in Monroeville, Pennsylvania, to Cranberry Woods in Cranberry Township, Butler County, Pennsylvania, as reported in a 2007 memo to its employees that stated the main reason was the rapid expansion of the global nuclear industry. Construction began in July 2007, the move lasted from June 2009 to December 2010. The Repair, Replacement and Automation Services (RRAS) business segment moved to Cranberry Township earlier than other business segments to help alleviate space issues at the headquarters in Monroeville and was completed in spring of 2008. As part of this move, Westinghouse piloted the first commuter shuttle running an all-day loop between Monroeville and Cranberry Township. The shuttle ceased operation after Westinghouse formally closed, and sold their Monroeville facility in 2012.
In 2015, concerns were expressed that the value of assets and goodwill in Westinghouse were overstated. Following an accounting scandal in which profits were overstated at Toshiba, leading to the CEO resigning, Toshiba stated that the Westinghouse nuclear business was more profitable than at acquisition in 2006.
In December 2016, Toshiba said it expected to write down its investment in Westinghouse by US$2.5 billion, adding that it was possible that their investment in Westinghouse could ultimately have a negative worth, due to cost overruns at U.S. nuclear reactors it was building. In February 2017, Toshiba revealed unaudited details of a 390 billion yen ($3.4 billion) loss, mainly in its US nuclear business which was written down by 712 billion yen ($6.3 billion). On 14 February 2017, Toshiba delayed filing financial results, and Toshiba chairman Shigenori Shiga, formerly chairman of Westinghouse, resigned. Toshiba considered selling the Westinghouse nuclear business.
On 29 March 2017, Toshiba's Westinghouse filed for Chapter 11 bankruptcy, citing a yearly loss for Toshiba that could exceed $9 billion, almost three times its previous estimate. The Wall Street Journal reported that four nuclear reactors being built in the southeastern U.S. would be left to an unknown fate. In July, 2017, the co-owners of the V.C. Summer plant announced that the project was terminated. On September 24, 2017, the Post & Courier reported that Westinghouse had hired unlicensed workers to create mechanical and electrical blueprints for the V.C. Summer expansion without having a professional engineer sign off on them which was in violation of state law. The blueprints were often faulty and led to significant delays. The U.S. government had given $8.3 billion of loan guarantees on the financing of the four nuclear reactors being built in the U.S.
Besides the issues with the AP1000 design, the fuel manufacturing division has been profitable, but not enough to cover corporate overheads and support the other divisions. Research and development investment in fuel manufacturing has been low, which has impacted the quality and comparative performance of its fuel compared to competitors.
On 6 April 2018, Toshiba announced the completion of the sale of Westinghouse's holding company to Brookfield Business Partners and some partners for $4.6bn.
Further information: Westinghouse Licensing Corporation
Although no longer associated with CBS Corporation (now Paramount Global), Westinghouse Electric Company LLC, as of 2011, still uses the trademarks owned by Westinghouse Electric Corporation, Paramount's brand management subsidiary, under license, as is the case with other Westinghouse licensees.
A revived interest in the nuclear power generation field in the late 1980s[when?] led to Westinghouse's development of the AP600 reactor which received NRC approval[when?]. Interest in the Westinghouse design, but with larger power output led to the change of the project to the AP1000 in 1999 and shortly after became the first Generation III+ reactor to receive final design approval from the NRC in 2004. As of 2014, four of these units are under construction in China, though the first was due to come on-line in November 2013. and has been delayed until December 2014. The delay due to the constantly changing, and consequently untested, design prompted Li Yulun, former vice-president of China National Nuclear Corporation, in 2013 to raise concerns over the safety standards of the plant. Citing a lack of operating history, he questioned the manufacturer's assertion that the AP1000 reactor's "primary system canned motor pumps" were "maintenance-free" over 60 years, the assumed life of the reactor, and noted that Westinghouse had yet to receive approval from British authorities on an improved version of AP1000. As of 2019 all four AP1000 reactors in China are operating.
As of January 2009, six AP1000 plants had been ordered in the US, and several other customers had chosen the AP1000, if they were to build new nuclear plants, for a combined total of at least 14 new plants, announced by the NuStart Consortium, Duke Power, Progress Energy, Southern Nuclear and SCE&G. In May 2011 after the Fukushima Daiichi nuclear disaster, US government regulators found problems with the design of the shield building of the new reactors. Gregory Jaczko, chairman of the Nuclear Regulatory Commission since 2005 said that computations submitted by Westinghouse about the building's design appeared to be wrong and "had led to more questions." He said the company had not used a range of possible temperatures for calculating potential seismic stresses on the shield building in the event of an earthquake, for example. The NRC asked Westinghouse not only to fix its calculations, but also to explain why it submitted flawed information in the first place. Westinghouse countered that the "confirmatory items" that the commission was asking for were not "safety significant."
In November 2011, the AP1000 Oversight Group published a report highlighting six areas of major concern and un-reviewed safety questions requiring immediate technical review by the NRC. The report concluded that certification of the AP1000 should be delayed until the original and current "unanswered safety questions" raised by the AP1000 Oversight Group are resolved.
In December 2011, the UK's Office for Nuclear Regulation published a design assessment report on the AP1000 reactor which highlighted 51 'Generic Design Assessment' issues remaining that must be addressed before the assessment would be completed.
In October 2013, US energy secretary Ernest Moniz announced that China was to supply components to the US nuclear power plants under construction as part of a bilateral co-operation agreement between the two countries. Since China's State Nuclear Power Technology Co (SNPTC) acquired Westinghouses's AP1000 technology in 2006, it has developed a manufacturing supply chain capable of supplying international power projects. Industry analysts have pointed out that there are gaps in the Chinese supply chain.
Westinghouse Electric Company fully owns several subsidiaries in Europe, such as the European Service Center, also called Westinghouse Electric Belgium located in Nivelles, Belgium, where equipment is prepared for projects throughout Europe. After Westinghouse's 1990 takeover of ABB Reaktor in Germany, it transferred radiological storage activities located in Ladenburg, Germany, to consolidate in Nivelles, which had to be extended. Soon afterwards[when?] another expansion was necessary as employees in the Brussels office were transferred to Nivelles. It was estimated that 200 people were working in Nivelles at the end of 2011.[who?]
In 2001, Westinghouse took over Logitest in Les Ulis, France, one of 3 companies qualified to inspect nuclear steam generator plants for Électricité de France. After the French nuclear market partially opened in 2004 to suppliers from outside the country to fulfill European Commission directives regarding international competition, Westinghouse started to expand its business in France with a Westinghouse team located in Metz in charge of repair, replacement and automation services. By 2005, Westinghouse had 160 employees in France and two-thirds of Westinghouse's business in France was fuel supply. Westinghouse Electrique France is located in Orsay and Manosque near Marseille (engineering development). As of 2014, about 400 employees are part of Westinghouse in France.
Westinghouse owns a nuclear fuel fabrication plant at Västerås, Sweden which has provided nuclear fuel for Russian VVER-1000 nuclear reactors. In 2000 Westinghouse started development of fuel for customers in Finland and Hungary, supported by cheap Export–Import Bank of the United States loans, but the business remained small-scale in competition from cheaper Russian suppliers. A 2008 contract was agreed to supply VVER-1000 fuel; however, in trial use the fuel became deformed. In 2015, the European Union awarded $2 million in funding to a Westinghouse-led consortium to support the development of a more competitive fuel for the Russian built reactors. In 2018, the contract to supply VVER fuel was extended to 2025. In 2018, Westinghouse, under a further EU-funded project, became able to also supply VVER-440 fuel.
Westinghouse also has business locations in Italy, Germany, Spain, the UK, Russia, and Bulgaria.
In South Korea, Westinghouse has been involved in the construction of new nuclear plants since 1972, with the first plant Kori Nuclear Power Plant starting up in 1977 and in commercial operation in 1978, followed by eight reactors under construction in the early 1980s. Combustion Engineering (now Westinghouse) entered into a ten-year technology transfer program with the Korean nuclear industry aiming at self-reliance, which was extended in 1997.
In December, 2006, China's State Nuclear Power Technology Company (SNPTC) selected Westinghouse to provide four new AP1000 nuclear power plants. The first was due to come on line in 2013, but has been delayed until the end of 2014.
On 7 June 2016, Nuclear Power corporation of India have agreed to begin engineering and site design work for six nuclear power reactors in India and to conclude contractual agreements by June 2017.
Westinghouse has been involved in South Africa through support of the Koeberg Nuclear Power Station since the 1990s, both reactors are Westinghouse-licensed. In 2007, Westinghouse acquired IST Nuclear (Pty) Ltd, and won the final bidding process for new nuclear plants in South Africa, for which it signed an MOU in 2013. IST Nuclear provides services and systems for the pebble-bed reactor.
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signed a significant Memorandum of Understanding (MOU) with Sebata Group of Companies (Sebata Group), a leading South African-owned and operated engineering, procurement and construction management company, in preparation for the potential construction of Westinghouse AP1000® nuclear power plants in South Africa.