The Paducah Sun

January 29, 2000

Secretary opposes layoffs, shutdowns

By Bill Bartleman
The Paducah Sun

Energy Secretary Bill Richardson said he doesn't want the United States Enrichment Corp. to close either of its gaseous diffusion plants or lay off any employees.

Richardson, however, said he can't control the decisions but can only make USEC live up to the agreement the company signed when it took over the nation's uranium enrichment industry.

The U.S. Department of Energy owns the enrichment plants in Paducah and Portsmouth, Ohio, and leases them to USEC. When USEC was privatized in 1998, an agreement was signed to keep the plants operating until at least 2005 unless certain economic conditions arose. One condition is if USEC's profit margin falls below 10 percent for 12 straight months. Another is if the long-term market price per unit of enriched uranium drops below $80.

Officials of the atomic workers' union at the plants have repeatedly expressed concerns that USEC is meeting some of the criteria, but the firm had not acknowledged that or explained how the criteria are measured.

"I met with USEC officials recently ... and made my position clear, and that was to live up to the agreement and continue all operations until at least 2005," Richardson said Friday during a visit to Paducah.

The USEC board of directors is scheduled to meet next week to consider cost-cutting measures that include closing one plant or laying off as many as 850 workers spread between both plants. Richardson said he encouraged USEC not to lay off any workers.

When the firm was privatized, it agreed to limit layoffs to 600 workers at the two plants (including 100 job cuts through attrition) prior to July 1. Last year, USEC completed about 250 job reductions at each plant. Union officials have said they expect the firm to announce more cuts soon, effective on or after July 1.

Richardson would not say what else was discussed at his recent meeting with USEC executives. He did not say if he was told what the board would decide next week. "That is an announcement they will have to make," he said.

He said the federal government is no longer considering an option to give outright financial assistance to USEC to make up for losses it is incurring by reprocessing high-grade nuclear fuel purchased from Russia. The weapons-grade fuel is being reprocessed under an agreement between the two governments.

USEC officials have said it costs more to reprocess the fuel for use in nuclear plants than it sells for on the open market.

"Those discussions (of helping USEC to make up for the losses) have ended," he said.

If there are layoffs at the Paducah plant, Richardson said, some of the jobs could transfer to jobs in the cleanup operations.