Westinghouse Corporation Introduction Westinghouse and its Employees Westinghouse, fraud and corruption Westinghouse and the nuclear business Westinghouse Scandal Uncovered

If you say "Westinghouse" in the Czech Republic, everyone recalls the nuclear power plant Temelin. Few people know that they are the largest supplier of nuclear equipment in the world. And almost nobody considers them to be one of the biggest multinatinal concerns competing for world opportunities in Eastern Europe.

In the course of the 80's, when the world market was created, WH settled a number of strategic alliances with other concerns (Mitsubishi Electric, Siemens, ABB, AEG).

At the beginning of the 90's, WH went through major changes. In the years 1991 and 1992, it suffered more than 2 billion dollars in losses and its debts exceeded 6 billion; its stock value fell 60% from 1990 to 1992. In an attempt to reverse this crisis, WE sold off several of its divisions (electrical appliance and furniture production, construction of luxury buildings, financial services) in 1993.

Westinghouse and its Employees

From the standpoint of work safety and treatment of subordinates, WE belongs among the worst employers in the USA. From 1977 to 1990, the Occupational Safety and Health Administration (OSHA) found 1338 cases of illegal violations among domestic WH workplaces. Out of fifty closely studied firms, Westinghouse finished second worst from the viewpoint of work safety and workers' rights.

Westinghouse, fraud and corruption

In the history of the WH firm, many situations can be found when it resorted to illegal measures in order to obtain orders. Here are some illustrative examples:

1974 - WH received a contract for construction of the Bataan nuclear power plant in the Philippines in return for a payment of 17 million US dollars, even though a General Electric project won the contract bidding.

1977 - a Canadian branch of WH was convicted of using illegal methods (a secret agreement with General Electric, which eliminated competition) and had to pay a 150 000 dollar fine.

1978 - WH paid a 330 000 dollar bribe to get a contract for construction of a thermal plant in Egypt: the bribe was received by thea deputy of premeir Ahmed Sultan Ismail.

1987 - WH officials were convicted of overcharging the US Pentagon by 9 million dollars.

1991 - WH paid a 15 million dollar fine for environmental pollution.

1991 - WH officials were convicted of fraudulently manipulating 400 million dollars received from the government for its activities at Savannah River (it transferred money from one account to another in order to mask cost overruns); the Savannah River director was replaced due to this scandal.

1992 - WH paid 2.5 million dollars to the Brazilian government as an out-of-court settlement after being accused of fraud and negligence.

Westinghouse and the nuclear business

WH is the biggest nuclear reactor supplier in the world. From the total of 420 commercial reactors, WH has produced 84. The majority of orders however originated from the period of the 60's and 70's, when nulcear power was on the rise. From this time, WH, like other produces of nuclear equipment (e.g., Siemens, Framatome, etc.) has struggled with a lack of demand. For example in the USA, where WH built 52 reactors, no new orders have been built since 1974.

Citizens' movements say that economic reasons - cost increases and construction delays - played the decisive role in the retreat from nuclear energy. The "successes" of WH are definitely illustrated by the following statistics on reactors they produced in the US: an average 420% cost overrun and 5 years' delay compared to the original estimates.

Nor has reactor safety been brilliant as is shown by an overview of several events suffered by WH-built reactors:

in February 1983, the SCRAM systems at Salem NPP (1000 MW - New Jersey, US) broke down.

in December 1986, Surry NPP (820 MW - Virgina, US) broke down at full production and fractured the cooling pipes by an average of 45 cm. After almost 20 years of Surry's operation, it was determined that the reactors of this plant have a design error, because of which the cracking of a single pipe during operation would probably end in an active zone meltdown. On 15 February 1990, the NRC announced the six most problematic reactors in the USA. Among them are Surry-1 and Surry-2 (810 and 820 MW, Virgina, US) from Westinghouse.

On 21 May 1990, a serious accident occurred at Ringhals-2 NPP (840 MW, Sweden), when operators were not able to start either the main nor the back up pumps for the cooling pond where the fuel was placed during manual reactor operation

Cracking of two cooling pipes occurred at Millstone NPP (1200 MW, Connecticut, US) on 31 December 1990

On 9 February 1991, the worst Japanese nuclear accident ever happened at Westinghouse's Mihama NPP (500 MW). The report by Kansai Electric Power Co. and the Japanese International Trade and Industry Ministry stated that the equipment played an important role in the accident. A similar accident had already occurred in 1987 at North Anna NPP (940 MW, USA). Duquesne Light company, together with four other Pensnylvania and Ohio electricity companies, lodged complaints against Westinghouse. This was already the 12th such complaint, with more than 70 low-quality steam generators by the Westinghouse firm.

The loss of opportunities in the US market forced WH's leadership to try to sell nuclear reactors abroad, especially in Third World countries. The Philippine case is illustrative - Westinghouse built a non-functioning plant for 2.2 billion dollars against the projected price of 650 million dollars. This however is not an isolated case - Angra 1 NPP (Brazil) cost 4.5 times; Krsko (Slovenija) 6.5 times, and Sizewall B (Great Britain) 2.5 times more.

For more information check out the Temelin Bidding Scandal