Trump Officials Alarmed China May Bid for Westinghouse Unit

Trump Officials Alarmed China May Bid for Westinghouse Unit

The Trump administration is so alarmed that Chinese investors may try to purchase Westinghouse’s nuclear business that U.S. officials are trying to find an American or allied buyer for the company instead, according to Bloomberg citing people familiar with the matter. Cabinet members, including Energy Secretary Rick Perry and Treasury Secretary Steven Mnuchin, have discussed preventing Westinghouse’s purchase by a Chinese-linked company.

For years, Chinese entities have been interested in the nuclear reactor builder, and the company has been a repeated target of Chinese espionage. Westinghouse filed for Chapter 11 bankruptcy protection on March 29 and its parent company Toshiba is seeking a buyer for its money-losing reactor business. The Japanese company said it replaced Westinghouse Chairman Daniel Roderick with Mamoru Hatazawa. Roderick resigned all posts at the U.S. unit.

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. President Donald Trump will meet with Chinese President Xi Jinping for the first time at his Mar-a-Lago resort in Florida this week. A second official said the Trump administration is preparing for Westinghouse’s bankruptcy to come up in the talks.

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 U.S. 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. Westinghouse spokeswoman Sarah Cassella declined by e-mail to comment late Tuesday.

Administration officials so far have examined three potential courses to keep Westinghouse out of Chinese hands. The government might block a sale to a Chinese buyer; encourage an alternative bid from U.S. or friendly foreign investors; or the government might invest in the company directly in return for an equity stake, akin to the Obama administration bailout of U.S. automakers.