Toshiba's nuclear reactor mess leads back to a Louisiana swamp

Tokyo

IF you want to understand why Toshiba Corp is about to report a multibillion-dollar write-down on its nuclear reactor business, the story begins and ends with a one-time pipe manufacturer with roots in the swamp country of Louisiana.

The Shaw Group Inc, based in Baton Rouge, looms large in the complex tale of blown deadlines and budgets at four nuclear reactor projects in Georgia and South Carolina overseen by Westinghouse Electric Co, a Toshiba subsidiary.

On Tuesday, Toshiba is expected to announce a massive write-down, perhaps as big as US$6.1 billion, to cover cost overruns at Westinghouse, which now owns most of Shaw's assets.

The loss may eclipse the US$5.4 billion Toshiba paid for Westinghouse in 2006 and has forced the Japanese industrial conglomerate to put up for sale a significant stake in its prized flash-memory business. Toshiba had to sell off o…