The Yomiuri Shimbun WASHINGTON — Concerns are mounting within the administration of U.S. President Donald Trump that his economic policies could be negatively affected if Toshiba Corp.’s U.S. subsidiary Westinghouse Electric Co. (see below) files for bankruptcy, according to a source familiar with related proceedings in the U.S. Commerce Department.
If the U.S. nuclear power company files for bankruptcy, it could also negatively impact an upcoming Japan-U.S. economic dialogue intended as a new framework to discuss a wide variety of issues including trade, finance and investment. The bankruptcy of the private firm could develop into an intergovermental issue, according to the source.
More specifically, senior officials of U.S. Commerce and Energy departments are concerned that a move by Toshiba for Westinghouse to file for Chapter 11 of the U.S. Bankruptcy Code (equivalent to Japan’s Civil Rehabilitation Law) would see a few thousand employees laid off.
Furthermore, U.S. officials are increasingly worried that Toshiba’s plight could be deemed a failure of foreign investment into the United States. This could then negatively affect the policies of the Trump administration for promoting investment from foreign companies and creating jobs, according to the source.
It was unknown until Friday if the U.S. government opposes Westinghouse filing for bankruptcy.
On the Japanese side, the government and Toshiba share the view that there is no option but for Westinghouse to file for bankruptcy if Toshiba is to reorganize its management and prevent an expected loss of over ¥700 billion in the nuclear power business from swelling further.
According to the source, Finance Minister Taro Aso’s remarks at a press conference held after a Cabinet meeting on March 10 upset the United States. Aso said Toshiba “needs to decide by the end of the month” whether to file for bankruptcy.
Aso, who is also deputy prime minister, will head the Japan-U.S. economic dialogue scheduled to start in April along with U.S. Vice President Mike Pence.
According to the source, the United States regards the Toshiba issue as a “touchstone” of bilateral economic cooperation. “If [the Japanese side] fails to deal with the issue properly, it could leave an unpleasant feeling.”
Economy, Trade and Industry Minister Hiroshige Seko, who is visiting the United States, held talks for the first time with Commerce Secretary Wilbur Ross, Energy Secretary Rick Perry and others on Thursday.
According to Seko, the two U.S. secretaries referred to Toshiba’s management issues and stressed that the company’s financial stability was crucial to the United States. The Japanese and U.S. governments agreed they would share information on issues related to Toshiba.
Seko and Ross also reconfirmed the importance of bilateral economic cooperation and agreed to move toward strengthening collaboration in the energy field.
■ Westinghouse Electric Co.
A U.S.-based global nuclear power company that started related businesses in 1957. It offers nuclear products and services including planning and maintenance of nuclear power plants, and also deals with decommissioning reactors. It excels in technology related to pressurized water reactors, which come with huge reactor containment vessels. The company was bought by Toshiba Corp. in 2006 for more than ¥600 billion. Currently, Toshiba has an 87 percent stake, a corporation in Kazakhstan owns 10 percent, and Japanese heavy machinery maker IHI Corp. owns 3 percent.Speech