January 26, 2000
USEC meets with no cuts yet
By Joe Walker
The USEC Inc. Board of Directors expects to resume meeting next week amid word that it is considering closing one of its two uranium enrichment plants or laying off as many as 850 workers at both plants.
The board adjourned after meeting for several hours Tuesday at company headquarters in Bethesda, Md. It expects to reconvene sometime next week, although an exact date had not been set, said USEC spokeswoman Elizabeth Stuckle.
"There is a very full agenda, including discussing company initiatives and cost-cutting reviews," she said. "The board anticipates announcing (quarterly) earnings and other matters considered by the board following the conclusion of the meeting next week."
Stuckle would not confirm if a plant closing or layoffs were part of the discussion. But in recent months, the board reportedly has had ongoing review of power costs, operating costs, overhead, work force levels and possibly closing one of two plants at Paducah and Portsmouth, Ohio.
Richard Miller, Washington-based policy analyst for the plants' atomic workers' union, said federal lawmakers from Kentucky and Ohio were told the agenda included a consideration of layoffs or plant closure. David Fuller, president of the atomic workers' union at the Paducah plant, said he expects an announcement about layoffs within the next month.
Late last year, the plants' atomic workers' union cited a memorandum from a USEC lobbyist that said "several hundred" jobs would be cut at the plants. Union officials said they anticipate as many as 850 layoffs - about 450 at Portsmouth and 400 at Paducah. The plants employ about 2,100 and 1,700, respectively. USEC laid off 250 people at each plant during the past two years.
USEC also is looking at technology to replace 50-year-old gaseous diffusion, an outdated, costly method used by the plants to enrich uranium for nuclear fuel. The firm said it expects to pay an Australian firm $5 million by spring to continue researching a laser-based technology called SILEX.
Gas centrifuge also is being evaluated. It is an established enrichment technology used by some foreign competitors such as EURENCO, a European consortium that has been underselling USEC.
Long before USEC was created by Congress, the Department of Energy shut down a new, $2.5 billion centrifuge plant at Portsmouth only a month after a successful trial run in 1985. Although the centrifuge equipment was sold, the state-of-the-art buildings remain for warehousing, offices and other uses.
Stuckle confirmed that a pilot centrifuge plant in the mothballed facilities at Portsmouth is under consideration. That has fueled rumors that USEC might close the Portsmouth diffusion plant in favor of the pilot plant and keep the Paducah plant running.
"What you're hearing is speculation," Stuckle said. "Until we get further along in our centrifuge considerations, we would not actually pick a site for a facility."
While the Portsmouth buildings are among many factors to be evaluated, they are "by no means the deciding factor" in considering centrifuge as a replacement technology, she said.
Dan Minter, president of the atomic workers' union at Portsmouth, said employees there did not know the board was considering layoffs or closing a plant. He said they were adopting a wait-and-see attitude.
''We don't want to plan for the funerals until we have to,'' he said.
The House Commerce Committee has been investigating a variety of issues stemming from the privatization of USEC. Chairman J. Thomas Bliley Jr., R-Va., has said he would schedule hearings early this year, but no date has been set.
USEC became a publicly held corporation in 1998 through the sale of stock. Since then, its stock price has plummeted more than $8 a share amid a glutted world market for enriched uranium. Although the firm was founded to make the Department of Energy-owned plants more profitable, many wonder now if that was a good idea.
''It may be time for the government to re-evaluate whether it should buy USEC back,'' Miller said.
The Associated Press contributed to this report.