Everything Old Is New Again: Westinghouse Steps Forward

For a lot of folks, Westinghouse is a name associated with the washing machines, TV sets and vacuum machines that graced their suburban tract homes growing up. Even at the time, though, the brand seemed a little old-fashioned, something with the ordure of musty velour.

But Westinghouse was then a powerhouse almost as broad based as General Electric. In recent years, as a division of Toshiba, Westinghouse Electric Company (the electronics and appliance maker still exists as Westinghouse Electric Corporation, owned by CBS) has largely focused on the nuclear market. Here's how they've spent the last several years:

For the past few years, amid a resurgence of the nuclear power industry, Westinghouse's Engineering Services group has been furiously upgrading and refurbishing aging plants—and minting money along the way.

But that work is almost done, and Business Week's Brian Hindo documents what Westinghouse is doing to move forward and retain its relevance:

Last fall the company won a contract to make repairs to Alloy 600, a metal that is found in old reactors. It had never done that before. Nor had it serviced a type of reactor that uses boiling, rather than pressurized, water to generate steam. Now it has a satellite office in San Jose, Calif., dedicated to such jobs.

But even this isn't the full point. That comes through Westinghouse's determination to push itself forward though taking on a culture of risk aversion and reversing it to allow the company to think outside hidebound assumptions and discover what else it could do and how it could do them:

[Engineering Services head Nick Liparulo] needed to send a strong signal that risk-taking wouldn't be a ticket out the door. At [University of Virginia's Darden School of Business professor Jeanne] Liedtka's suggestion, he took nine of his best managers and made them "growth leaders." Their sole responsibilities would be to chase down new technologies and markets.

As Liedtka's involvement suggests, this has more than a whiff of an academic business theory given form - expect many pop business books to come out about it if they haven't already - but the results are good and it has pushed Westinghouse forward. Read the whole article - it's a good, positive one and gets the weekend going right - and see if Westinghouse hasn't blown the dust off the velour and made it plush again.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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