Westinghouse Electric is known as the global nuclear power technology giant, but the current total debt is as high as 9.8 billion US dollars. How did Westinghouse go bankrupt? What impact will this helpless move bring to the troubled Toshiba? We ask an expert to analyze it for you.
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Westinghouse's century-old glorious history is hard to reproduce.
Toshiba bought "Waterloo" at sky-high price.
Q: Westinghouse Electric and Toshiba Corporation of Japan are both world-renowned electrical enterprises. Why did Toshiba acquire Westinghouse Electric to get its hands on the global nuclear power business?
A: Westinghouse was founded in 1886 and its headquarters is in Pittsburgh, Pennsylvania, USA. The company was once a world-famous American electrical equipment manufacturer and a world-leading nuclear power technical service contractor. At present, Westinghouse Electric provides nuclear power technology for nearly 50% of commercial nuclear power plants in the world and nearly 60% of commercial nuclear power plants in the United States.
1955, Westinghouse Electric provided the S2W marine reactor for the first nuclear-powered submarine "Nautilus" in the United States. 1957, Westinghouse Electric provided the world's first PWR nuclear power unit for the nuclear power plant in Pennsylvania, USA. Before the US 1979 Three Mile Island nuclear accident, Westinghouse Electric was responsible for the construction of about 50% nuclear power plants in the United States, and also independently built 3 1 nuclear power plants overseas. At the same time, Westinghouse also cooperated with foreign companies to design other 8 1 nuclear power plants. In the mid-1970s, the number of employees and sales of Westinghouse Electric reached an all-time high.
However, after the Three Mile Island nuclear power accident, Westinghouse's sales performance began to decline due to factors such as the suspension of nuclear power plant construction in the United States. Since 1990s, Westinghouse Electric has gradually sold its core business units. 1999, Westinghouse Electric sold its nuclear power business unit to British Nuclear Fuel Co., Ltd. for 123 billion US dollars. In 2006, British Nuclear Fuel Co., Ltd. handed it over to Toshiba for $5.4 billion. The latter thus acquired a 77% stake in Westinghouse Electric.
As we all know, Toshiba Corporation of Japan, founded in 1904, was once a world-famous electrical appliance company. Since the beginning of this century, Toshiba believes that with the economic rise of China and newly industrialized countries and the improvement of environmental awareness in various countries, the global nuclear power industry will usher in a new round of development opportunities in the future. To this end, Toshiba began to set foot in the global nuclear power business.
The acquisition of Westinghouse Electric in 2006 is precisely the purpose of Toshiba's acquisition of the next generation of nuclear power technology in order to further explore the global nuclear power market. However, Toshiba's bid was twice as high as that of other Japanese nuclear power companies bidding for Westinghouse at that time, which made Japanese domestic nuclear power counterparts complain. Since then, Toshiba, aiming at the global nuclear power business, has continued to spend $654.38+06 billion to increase its stake in Westinghouse to 87%, and finally acquired Westinghouse for $7 billion.
The author believes that the reason behind Toshiba's merger with Westinghouse Electric is based on the judgment that China will independently choose the third generation nuclear power technology in the future. But I didn't expect this acquisition to become the beginning of Toshiba's investment in the global nuclear power business "Waterloo".
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Step by step, the deeper the "set", the stronger it will be.
Internal troubles and foreign invasion "lose your car to protect your handsome"
Q: As a global technology giant, how did Westinghouse go bankrupt? What is the reason for Toshiba's big loss?
A: In 20 15, Toshiba acquired another American CB &；; A company's nuclear power business subsidiary became the "fuse" of this "nuclear power gate" incident.
Before the merger, Westinghouse Electric and CB&; My subsidiary has been a strategic partner for many years. In 2008, the two companies contracted two nuclear power plants in Georgia and South Carolina.
According to the report released by Toshiba, since March 1 1 Great East Japan Earthquake, governments all over the world have once again strengthened the safety standards of nuclear power plants, and the United States is no exception. As a result, the cost of related equipment and equipment required for the construction of the above four groups of nuclear power plants has been rising continuously, and the construction period has been delayed again and again, resulting in a sharp increase in labor costs. The final construction cost far exceeded the original construction budget of 2 trillion yen, reaching 2.6 trillion yen, and the construction period was delayed by 1 to 3 years respectively.
Toshiba said that according to the initial agreement, if the working capital for the construction of nuclear power units is less than $65,438+$065,438+$74 million, CB&: Company I will be responsible for financing the insufficient part. However, with the increase of construction cost and the extension of construction period, Westinghouse Electric and CB&; There was a serious disagreement on the cost sharing, and finally it developed to the point of going to court.
In order to avoid further delay in the construction period and resolve their differences as soon as possible, Toshiba acquired CB&; Nuclear power business subsidiary.
Toshiba originally wanted to control differences and reduce transaction costs through mergers and acquisitions, but I didn't expect this merger to completely break Toshiba's dream in the field of nuclear power. The ever-expanding construction cost has not been controlled, but Toshiba has been firmly "trapped", and its nuclear power business has suffered huge losses, which eventually led to Toshiba delaying the release of the financial statements for the fourth quarter of 20 16 twice, which has had a great impact on Japanese society.
According to the data released by Toshiba, since the merger of 20 15, the total debt of Westinghouse Electric has risen instead of falling, and has climbed to $9.8 billion. Affected by this, it is estimated that the final loss of Toshiba's consolidated performance in fiscal year 20 16 may be as high as 1 trillion yen, which will exceed the loss record of 787.3 billion yen set by Hitachi in fiscal year 2008 and become the biggest loss of Japanese domestic manufacturing industry so far.
In order to minimize the company's losses, Toshiba can only reluctantly give up "losing the car to protect the handsome". After repeated weighing and multi-party game, on the 29th of last month, Toshiba announced that its Westinghouse Electric Company had formally applied to the new york Federal Bankruptcy Court for the application of Article 1 1 of the US Federal Bankruptcy Law. Westinghouse Electric said that it will receive $800 million in asset financing during the restructuring period, all of which will be invested in the existing nuclear power plant business.
Toshiba said that Westinghouse's application for bankruptcy will be the first step for Toshiba to successfully rebuild its business, which will help prevent overseas nuclear power business from bringing further risks to its business operations.
It can be said that the bankruptcy of Westinghouse Electric Company, the global nuclear power technology giant, is an inevitable result, otherwise Toshiba will be hard to be immune. After Westinghouse Electric filed for bankruptcy protection, Toshiba, its parent company, will immediately start internal institutional reform and business restructuring to improve the financial situation of the enterprise. Among them, the "choice" around the nuclear power business department is a top priority related to Toshiba's own life and death.
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Dream of expanding overseas nuclear power business
Toshiba may choose to quit completely.
Q: What will Toshiba do in the future? Will there be a nuclear power business restructuring plan?
A: Westinghouse's application for bankruptcy protection also declared that Toshiba's efforts to expand its overseas nuclear power business ended in failure.
Judging from Toshiba's past departmental performance, the nuclear power business unit has always been the main "potential stock". But now, amid doubts, Toshiba not only needs to re-plan its future business, but also needs to give a convincing explanation on whether there are "fabricated financial statements" and whether the initial M&A decision is appropriate. In this context, it is not easy for Toshiba to correctly judge the future prospects of the nuclear power business department and come up with a reconstruction plan.
It can be expected that with Westinghouse filing for bankruptcy protection, Toshiba will probably withdraw from the global nuclear power business in the future. Recently, in order to improve and perfect the company's financial situation, control the debt scale and reduce losses, Toshiba made a decision to split and sell some semiconductor business departments and increase the financing quota of other companies. At present, the overall value of Toshiba's semiconductor business exceeds 2 trillion yen. The split sale of some departments will help to optimize resources, improve the overall product value of the company and raise enough funds for the internal restructuring of the company.
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High cost, long cycle and heavy commercial burden
Global nuclear power industry faces "reshuffle"
Q: What impact will Westinghouse bankruptcy have on the global nuclear power industry?
A: By the end of 20 15, there were 3 1 nuclear reactors operating in 3 1 countries, with a total installed capacity of 337GW. However, in recent years, under the double blow of the financial crisis and the accident of Fukushima nuclear power plant, the global nuclear power business is facing a severe situation, and the nuclear power generation is still at a low level compared with that before the financial crisis.
Many countries believe that the goal set by the Paris Agreement means that nuclear power will remain the main choice for power development in the next few years. However, with the continuous strengthening of safety standards for nuclear power construction in various countries, the investment cost of research and development technology, equipment installation and infrastructure construction is increasing, and the construction period is lengthened, which greatly increases the burden of nuclear power commercial operation. The possibility of global nuclear power business facing reform and restructuring is increasing, which is both a challenge and an opportunity for China's nuclear power industry.
At present, AP 1000 is considered as the most advanced third-generation nuclear power technology in the world, and Westinghouse Electric Nuclear Power Business Department is in a leading position in the development and application of this technology. The main motive of Toshiba's acquisition of Westinghouse Nuclear Power Division is to occupy China nuclear power market urgently and monopolize China nuclear power technology.
After the tripartite agreement, Westinghouse Electric mainly provides intellectual property rights, engineering and procurement services of AP 1000 technology for the AP 1000 project implemented in China, and the Chinese side is responsible for managing the construction and construction of the project. After years of verification, China has actually mastered the nuclear power technology of AP 1000. Therefore, Westinghouse's application for bankruptcy protection has basically no impact on domestic nuclear power projects.