Without new nuclear plants, Westinghouse makes do with smaller jobs

| Thursday, March 14, 2013, 11:53 a.m.

Westinghouse Electric Co. is seeing brisk business these days — underscored by a spate of overseas deals it announced in the past two months — that belies the pressure the company faces from a downturn in the industry.

The company's latest deal, announced Wednesday, calls for it to provide replacement nuclear fuel for a plant in Sweden. That follows deals in recent weeks in South Africa, China and the Czech Republic.

Westinghouse did not disclose the financial terms of any of the deals. But the new business is landed weeks after the company began cutting its workforce by 5 percent, or 660 jobs, because of a slowdown in orders for nuclear plants.

Cranberry-based Westinghouse had ramped up staffing, including in Western Pennsylvania, where it employs about 6,000, in anticipation of a boom in nuclear power business as utilities and governments looked for more economical and cleaner alternatives to coal-fired plants. But the nuclear renaissance that Westinghouse and others envisioned just a few years ago has lost steam.

The prospects were dimmed by lasting effects worldwide from the Great Recession, stiff competition from very low natural gas prices, and lingering fears about safety following the Japanese nuclear-plant meltdown that occurred two years ago this week.

Although Westinghouse has brought home several deals recently, those are not the large contracts the company needs, experts said.

“You're not seeing as much in new (plant) construction compared to plans the industry talked about a few years ago,” said Carol Werner, executive director of the Environmental and Energy Study Institute, an education and science policy organization in Washington.

Indeed, Westinghouse spokesman Vaughn Gilbert cited competition from very low natural gas prices and “economic slowdowns” across much of the globe as impacting the company's business and prompting job cuts.

“As a result, anticipated new plant orders have not materialized as quickly as we had expected and subsequent orders for fuel and services for this projected new fleet are also delayed,” said Gilbert.

Westinghouse hopes to complete the recent round of layoffs that it announced by early April. The company declined to say how many of the job cuts are in Western Pennsylvania. Those cuts follow the elimination of 177 jobs last May.

“Natural gas prices have been so low, it's knocked the bottom out of the overall nuclear renaissance” in the United States, said Werner. “So, the job cuts don't surprise me at all.”

Westinghouse hired about 5,000, or more than one-third, of its 13,300 employees in the past five years, when nuclear's prospects were more upbeat.

The “primary impact” on industry growth was the recession and reduced demand for electricity, said Nuclear Energy Institute spokesman Tom Kauffman.

Westinghouse did reach several agreements or benchmarks since January. In just the past two days, it was chosen to provide nuclear fuel for a Swedish power plant and linked with a South African company to fabricate fuel assemblies.

In February, Westinghouse said it set the containment vessel head atop its AP1000 nuclear reactor in China, a key step in the new reactor design. Days earlier, the company pledged to source steel from the Czech Republic for two nuclear power plants Westinghouse hopes to build there.

Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at tolson@tribweb.com.

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