Why Did Westinghouse Go Bankrupt?

Westinghouse, once founded by a major rival of Edison and known for introducing hundreds of engineering inventions to the world, has gone bankrupt. But where did this company start and how did it end up in bankruptcy? George Westinghouse was a creative American engineer who managed to challenge the great inventor Edison. One of his significant inventions was the air brake for railroads. Alongside Edison, he was a pioneer in the electrical industry. Westinghouse was one of Thomas Edison's main competitors in the early implementation of the electrical system in America. Ultimately, the Westinghouse system prevailed over Edison's direct current system. Alternating current, which is the foundation of today's advancements, is his legacy. Alternating current is an electric current where the flow changes sinusoidally, whereas in direct current, the flow is constant. Currently, electricity supplied to commercial companies and residential homes is alternating. From 1881 to 1889, the system we use today was designed by Nikola Tesla, George Westinghouse, Louisin Gaulard, John Gibbs, and Oliver Shallenberger. The system that Edison first used for commercial electricity distribution had limitations due to its use of direct current, which were resolved in this system. Edison strongly supported direct current due to his exclusive rights to many inventions in direct current technology, but ultimately, alternating current became widespread for household electricity supply. This success led to the rise of Westinghouse. This American company, established in 1889, was able to expand its activities with the substantial profits from its alternating current operations and after this success, extended its influence from household appliances to airplanes and nuclear power plants. The company also had a stake in the media world by purchasing CBS, acquiring the CBS media group in 1995. In 1914, at the height of Westinghouse's rise, its founder George Westinghouse passed away with 361 registered patents. However, after his death, the company continued to expand significantly, with contracts spanning from Russia to England. The company was a pioneer in building steam turbines for electricity production and established the first steam turbine power plant in Philadelphia in 1917. In 1920, the company entered the field of radio communications. In 1922, it entered the media sector by developing radio networks. In 1945, the company succeeded in developing gas turbines, a device that transformed the aviation industry in the following decade. In 1951, it established the first direct television connection in the United States. In 1967, the company began its activities in computing and became one of the world's pioneers in computers. In the 1980s, the company significantly increased its activities in robotics and electronics. The 1980s and 1990s were a time when the company, with an insatiable appetite, acquired many small and large companies to expand its activities in various fields. However, from the mid-1990s, the expansion became a burden for Westinghouse, and losses began in some parts of the company. In 1996, the company's defense electronics systems division was sold to American aerospace company Northrop Grumman. From this year, the sale of various parts of the company began. Ultimately, in 2007, a major portion of the shares of the nuclear energy division, operating under the name Westinghouse Electric Company, was acquired by Japanese company Toshiba. However, this division also became significantly loss-making after a few years. The newspaper 'Japan Today' reported that the company incurred more than four billion dollars in financial losses in the last fiscal year, and economic experts predicted its bankruptcy. Since Toshiba had collaborated with and acquired Westinghouse, the company's bankruptcy is of great importance to Tokyo. The American company has announced that it has set aside nearly 800 million dollars for advancing some of its projects, including the construction of nuclear power plants in China. In response, Beijing claims that this event will not affect its economic plans and the implementation of its nuclear facility projects. Westinghouse has been closely collaborating with China in the construction of nuclear power plants, and the Chinese side says that Westinghouse's bankruptcy is unlikely to pose risks for them. Since 2009, China and this American company have been executing one of the largest nuclear projects, under which four third-generation nuclear power plants with AP1000 reactors are being built in eastern China using this company's technology. Nuclear trade in Japan has been on a downward trend, especially after the tsunami and earthquake in 2011 and the Fukushima nuclear disaster, which led several countries to implement stringent safety regulations for nuclear power plants. The critical conditions of Westinghouse were exacerbated by rising costs in the nuclear industry, until the company was ultimately declared bankrupt.