US takes steps to keep Chinese away from Westinghouse

  • Business
  • Thursday, 06 Apr 2017

The Vogtle Unit 3 and 4 site, being constructed by primary contactor Westinghouse, a business unit of Toshiba, in Georgia, the United States. — Reuters

WASHINGTON: The Trump administration is so alarmed that Chinese investors may try to purchase Westinghouse Electric Co’s nuclear business that US officials are trying to find an American or allied buyer for the company instead, two people familiar with the matter said.

Cabinet members including Energy Secretary Rick Perry and Treasury Secretary Steven Mnuchin have discussed preventing Westinghouse’s purchase by a Chinese-linked company, three US officials said.

The administration is preparing for Westinghouse to come up during President Donald Trump’s first meeting with Chinese President Xi Jinping at his Mar-a-Lago resort in Florida today and tomorrow, an official said.

For years, Chinese entities have been interested in Westinghouse, and the nuclear reactor builder has been a repeated target of Chinese espionage. Westinghouse filed for Chapter 11 bankruptcy protection on March 29 and its parent company Toshiba Corp is seeking a buyer for its money-losing reactor business.

Trump administration officials and members of Congress are concerned the bankruptcy filing could allow a bid from an investment group with hidden Chinese backing, one of the officials said. All of the officials requested anonymity because of the sensitivity of the matter.

Among the chief concerns in the event of a Chinese purchase is the disclosure of nuclear technological secrets that could be used for either military or civilian purposes.

The US would almost certainly stop an open Chinese bid for majority ownership of Westinghouse’s nuclear business, a third official said. The government has legal authority to regulate corporate acquisitions involving sensitive national security technology.

The Japanese government would also oppose any effort to sell the Westinghouse business to a Chinese buyer, according to people familiar with the matter. Japanese officials have made that point clear to Toshiba executives, one of the people said.

Toshiba said it replaced Westinghouse chairman Daniel Roderick with Mamoru Hatazawa. Roderick resigned all posts at the US unit, according to a person familiar with the matter, who asked not to be identified because the details aren’t yet public.

Westinghouse spokeswoman Sarah Cassella declined by e-mail to comment.

Perry, Mnuchin, Secretary of State Rex Tillerson and Commerce Secretary Wilbur Ross are involved in discussions about how the administration would address a sale of the business, the officials said.

Southern Co CEO Thomas Fanning also has met with Perry and Tillerson to discuss Westinghouse’s fate, according to a person familiar with the discussions. The utility company has a stake in avoiding disruption of Westinghouse’s operations because the company is building two nuclear reactors for Southern subsidiary Georgia Power.

Administration officials so far have examined three potential courses to keep Westinghouse out of Chinese hands, said the person familiar with the discussions. — Bloomberg

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