Toshiba bought Westinghouse Electric, which provides appliances, energy, and more. Among the many things Westinghouse does is build nuclear power plants. And that’s the problem. Multiple nuclear plants are way late and way over budget. The result is Westinghouse just filed for Chapter 11 bankruptcy and Toshiba may not survive as a company. It is so bad that Toshiba is unable to report its earnings correctly.
This is probably the end of US-based nuclear power companies as a major force, and may well be the end of two formerly stable companies.
Toshiba’s continued write-down of Westinghouse nuclear power plants, all of them delayed by years and some of them being suspended outright, could hurt the company’s balance sheet so severely that it gets sentenced to second-class status on the TSE. That would trigger a deeper sell off of index funds mandated to hold the stock. If you have to point fingers, WEC’s nuclear power plant is where to aim.
Toshiba Corp., the 142-year-old conglomerate, warned Tuesday it may not be able to continue as a going concern as it grapples with billions of dollars in losses from its Westinghouse Electric nuclear business.
But some of what went wrong was beyond either company’s control. Slowing demand for electricity and tumbling prices for natural gas have eroded the economic rationale for nuclear power, which is extremely costly and technically challenging to develop. Alternative-energy sources like wind and solar power are rapidly maturing and coming down in price. The 2011 earthquake in Japan that led to the nuclear disaster at the Fukushima Daiichi plant renewed worries about safety.