Westinghouse to Cut Staff at Nuclear Unit

Westinghouse Electric, a leading worldwide producer of commercial nuclear plants, said Friday that it planned to trim its power systems division to cope with a continuing slump in the atomic power industry.

The company said changes will include staff cuts of less than 10% of the division’s 12,000 employees who design, build and service electric generating stations powered by nuclear and fossil fuel energy.

The staff reductions were expected to be made first through early retirements and are not necessarily the end of the changes, Westinghouse said in a statement.

“We will continue to take those steps necessary to keep costs competitive with global competition,” the statement said, without elaborating.

The nuclear power business has suffered because of the high cost of constructing plants, long safety-related delays in construction and sluggish growth in electricity usage.

The industry leader Westinghouse also was dealt a crippling blow by the Soviet Union’s Chernobyl nuclear plant disaster earlier this year.

“For new nuclear reactor orders in the United States, I see none for years and years, and overseas it’s really very spotty and very competitive,” said Robert McCoy, an analyst with Kidder, Peabody.

“If I were running the business, I’d assume we would get no nuclear orders. And if we got one, it would be icing on the cake,” he added.

But McCoy said Westinghouse’s prospects in nuclear fuel processing and plant servicing “still look reasonably healthy.”

Seventy-two nuclear power plants designed and built by Westinghouse are in operation around the world, the company said. An additional 20 units are on order or under construction.

The last order placed in the United States was in 1978. The last order on which construction has begun was placed in 1973.

Westinghouse maintains that the electric power industry will recover in the early to mid-1990s as today’s excess generating capacity is used up by slowly growing demand.

For now, however, the company said cost reductions are necessary.

“Every member of my staff has implemented drastic budget cuts for 1987,” power systems general manager Jim Moore said in a memo to employees.

“Unfortunately, even with these actions, we’re still a long way from where we need to be to remain a profitable business in the years ahead.

“Our profitability is declining, and some of the customer orders we had originally accounted for . . . have not come our way,” Moore said.

Moore’s memo was reported Friday by the Wall Street Journal.