General Electric Company (GE): Liability in Japanese Nuclear Crisis

General Electric Company (GE) While it is still early in the unfolding nuclear facility crisis in Japan, we are getting many questions from investors as to what GE’s liability might potentially be. Based on the long-standing channeling laws in effect in multiple countries (including Japan, China, France, Canada, Germany, Russia, UK, and the US), liability for nuclear accidents and damage to third parties is channeled exclusively to the plant operators and the government. The plant operators carry the insurance. This would mean that there is no right to recourse against suppliers of nuclear equipment like GE. GE designed all six of the reactors at the Fukushima Daiichi facility, which is operated by the Tokyo Electric Power Co (TEPCO). Reactors 1, 2, and 3 are failing and the other three (4, 5, and 6) were offline at the time. GE supplied equipment for reactors 1, 2, and 6. Toshiba supplied 3 and 5, and Hitachi supplied No. 4. In the meantime, GE has been saying publicly that it is offering technical assistance to TEPCO and the Japanese government. By our estimates, GE’s nuclear business represents about 3% of total company revenues. 

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