Trade unions are sounding the alarm in Britain over the fate of the Moorside nuclear power plant project that is expected to add 20,000 jobs in West Cumbria, in northwest England, but the Toshiba-owned company with the contract to build the new three-reactor plant is holding firm, announced Tuesday that the project was still on.
Headlines around the globe were proclaiming the contract for NuGeneration in Britain – 60 percent owned by Toshiba Corp and 40 percent by Engie, a French firm – was going down the tubes after Toshiba sounded ambiguous about the project. Toshiba made no substantial commitment Tuesday but said it had completed a review of its struggling nuclear power division, Westinghouse Electric Company, which it purchased in 2009 with high expectations.
But Westinghouse has been struggling in the post-Fukushima Daiichi disaster era. To help trim redundancies, Westinghouse purchased CB&I Stone and Webster, Chicago Bridge & Iron’s nuclear construction division. But losses only escalated, as the layoffs never developed. As a rule, it is harder to claim redundancies from a new purchase when business is slower than it is when business is booming because you can then operate with economies of scale working in your favor.
Toshiba said Tuesday that it expected to book a loss of $3.4 billion in the fiscal year ending March 31. Previously, the company had predicted a net profit of about $2 billion.
Toshiba’s nuclear division contributed the lion’s share of the losses, coming short by $6.3 billion last year, according to the Associated Press.
In response to the losses, Toshiba said the corporation’s chairman, Shigenori Shiga would step down, although he will retain an executive position with the company.
Last month, Toshiba said it would scale back on foreign construction projects, relegating Westinghouse to a service-oriented business that also made components, while staying away from reactor construction. However, NuGen’s project was left undecided.
This week, Toshiba said it would “consider participating in the Moorside project,” – not a ringing endorsement. It said participation involved a financial caveat. Toshiba said it would consider Moorside “without taking on any risk from carrying out actual construction work.”
“As planned from the beginning, Toshiba will seek to sell shares to interested parties,” the company said.
In a statement, NuGen announced that Toshiba committed to the project that is expected to cost about $12.4 billion. “NuGen acknowledges the announcement that Toshiba’s review into the future of its nuclear power business outside Japan is complete and that it remains committed to developing NuGen’s Moorside Project,” which is designed to include three Westinghouse AP1000 reactors.
Its Chief Executive Officer Tom Samson said the project had “made significant progress since Toshiba took over as a major shareholder in 2018. The site has already been proven as suitable for three Westinghouse AP1000 reactors, two phases of consultation have found the public overwhelmingly support of the need for new nuclear and have helped shape the plans for Moorside,” he continued.
Samson also noted that the British government “is supportive of NuGen, as a maturing and highly skilled nuclear organization.”
The government was also “firmly committed to new nuclear – stating that nuclear has a critical role to play in securing our future energy needs, especially as we look to move to a low carbon society.”
How much of that is wishful thinking is hard to say? Unions are making noise about the potential loss of jobs, while Toshiba is doing what it can to stave off bankruptcy, including selling its lucrative memory chip business.
Lately, the reports point to an escalating trend of bad news. In January, Toshiba said it would sell 20 percent of its memory chip business. Headlines this week point to the possibility that the conglomerate may have to sell the entire company to stay afloat.