Westinghouse is the US nuclear unit of Toshiba which is currently running into losses and had to file for bankruptcy under chapter 11 of bankruptcy. They have reported a huge loss of $8.4 billion loss in the last financial year which ended in March 2017 due to delay and over the spending of cash for the construction work at their two locations in Georgia and South Carolina. Westinghouse was bought by Toshiba in 2006 and now the auditors have given a red signal to the company for further operations. Both Westinghouse and Toshiba are giants in their operational areas but this bankruptcy has brought a kind of embarrassment for them.
Investment in nuclear business is a wrong decision in current scenario because of the environment of nuclear power is very severe and doesn’t allow sustaining in the long run. Filing for bankruptcy is the only option left with Toshiba to avoid more losses to be added to their books of accounts. If they don’t file for bankruptcy, then they might end up recording net loss of more than $9 billion for the financial year. The loss is still continuing because last month they suffered a total loss of $3.5 billion due to active operations of Westinghouse.
The alarm rang for the company in the month of December when they have recorded huge losses in the account books of Westinghouse but still, they tried to drag the situation and avoid the drastic step of filing for bankruptcy till now. Toshiba and Westinghouse didn’t disclose any information related to their long-term unfinished projects but are in conversation with the owners of a couple of nuclear powerhouses to strategize a plan to complete the pending construction work at their plants till the procedure gets completed.
Westinghouse is one of the oldest conglomerates which have helped the US economy to flourish and prosper during the past two centuries. Westinghouse is credited to have developed air brakes which improved the safety measures of the trains and freight transportation. The founder of Westinghouse is also known for innovating the alternative electric current facility which is still being utilized everywhere. Toshiba had intentions to enter the nuclear power sector and hence planned to purchase Westinghouse at $5.4 billion in 2006 which proved to be the wrong decision for them. Predictions were that Toshiba might have overpaid for purchasing Westinghouse but this helped Westinghouse to purchase other two nuclear construction houses like CB&I Stone & Webster. The plan was to complete their reactor project with the help of these companies.