The Paducah Sun

February 4, 2000

Fuller: Workers 'betrayed'

By Joe Walker
Sun Business Editor

USEC Inc. and the federal government have betrayed workers at the Paducah and Portsmouth uranium enrichment plants with the announcement of 850 more job cuts, said David Fuller, president of the Paducah plant's largest labor union.

"I've got my government to thank for this," he said. "These people's jobs and livelihood have been sacrificed by their own government. This has made Wall Street rich, politicians happy, the Russians happy and USEC headquarters happy.

"The only losers in this sweet deal are some workers in two remote little areas out in the hinterlands."

Fuller represents Local 5-550 of the Paper, Allied-Industrial, Chemical and Energy Workers International Union. The union accounts for about half the Paducah plant's work force.

His comments referred to an act of Congress to privatize the plants, once run by the Department of Energy, to try to make them more profitable; a $1.9 billion public stock offering partly underwritten by huge investment firms; a Clinton administration disarmament deal to buy $8 billion in overpriced uranium taken from nuclear warheads, and senior USEC managers led by Chief Executive Officer William H. Timbers Jr., whose salary, stock and other compensation grew from $350,000 in 1997 to $2.4 million last year.

Asked how workers could reconcile Timbers' salary with the layoffs, USEC spokeswoman Elizabeth Stuckle said independent studies have shown his income is "on the low side of comparable businesses."

Richard Miller, Washington-based policy analyst for the union, also lashed out at USEC senior managers.

"They've decided to take most of the savings ($39 million annually) from layoffs and transfer it directly to stockholders," he said. "That's because senior managers of USEC, whose jobs are in jeopardy, are trying to buy out the shareholders so they can remove them as a source of contention. The workers are being put on that sacrificial altar."

Miller said USEC's "very transparent announcement" of buying back another 20 million shares of stock will face great opposition by Congress and the Department of Energy if the firm asks for help in opening a pilot plant using gas centrifuge, a replacement technology for outdated gaseous diffusion.

USEC is considering opening a test centrifuge plant at Portsmouth, where DOE abandoned a $1.5 billion centrifuge operation in 1985 in favor of researching a laser-based enrichment technology called AVLIS. After 14 more years of research on the laser process, USEC dropped AVLIS last year, saying it was resuming studies of centrifuge and starting to look at another laser technology called SILEX.

Energy Secretary Bill Richardson said Thursday he opposes the layoffs. "While the Energy Department cannot reverse USEC's decision, I will not just stand by," he said.

A week ago, Richardson visited both plants to announce more Clinton administration funding ($109 million at Paducah) for environmental cleanup, waste management and uranium cylinder conversion work, and including more than $3 million to help displaced employees.

Richardson said the department's Work Force Restructuring Plan will be released today for public comment. The plan includes details of planned restructuring and community transition activities at both plants.

"It will propose, to the maximum extent possible, to move some of the potentially displaced workers to new cleanup and other Energy Department-funded projects" in Paducah and Portsmouth, he said. "Additionally, we have programs available to help workers transition to new careers and help the communities develop new economic activities."

U.S. Rep. Ed Whitfield, R-Hopkinsville, said that while more layoffs were anticipated, "I am still gravely disappointed with (Thursday's) announcement."

He said he would support union efforts to move as many displaced workers as possible into environmental cleanup jobs. "It is now even more imperative to secure adequate funding for the conversion facility at Paducah and for the (DOE) Office of Worker and Community Transition Assistance," Whitfield said.

He also said he would hold congressional hearings to continue looking at USEC's "alarming financial problems and alleged questionable moves by administration officials during the privatization process."

The massive layoffs will make work of the DOE-sponsored Paducah Area Community Reuse Organization, or PACRO, even more critical, said its chairwoman, Kristin Williams. The group was established to help offset losses.

Williams encouraged workers to contact PACRO Program Director Jennifer Beck-Walker at the Purchase Area Development District office for information on a PACRO revolving loan program to help start small businesses.

"We're just in the starting stages of the worker transition program, evaluating skills and seeing what jobs are out there to match them with," Williams said.

Williams said $6 million in federal money received last year also has been used to help industrial parks in the area improve to lure businesses that could create jobs for displaced plant workers.

Williams and Fuller, also a PACRO member, said they were unsure exactly how the DOE worker transition funding translates into help for laid-off employees.

USEC says the latest round of job cuts will be a mix of voluntary and involuntary layoffs. For union members, voluntary layoffs have traditionally meant doubling severance pay, whereas forced layoffs have not, Fuller said.

"I'm quick to add that USEC hasn't given us any details," he said. "I doubt if people are willing to give up their jobs without more information."

Elaine Spalding, president of the Paducah Area Chamber of Commerce, said she was surprised at the layoff announcement so soon after Richardson's visit. "But this is something I know business leaders have been anticipating and there are programs in place, such as PACRO, to address it," she said.

Losing high-paying manufacturing jobs generally is harder on a community than losing workers in other areas, like the service sector, Spalding said.

"There are just not that many big economic development projects out there anymore," she said. "That's why it's so important for us to grow our own businesses and develop entrepreneurial programs."

Martin Milkman, associate professor of economics and finance at Murray State University, said the Paducah plant is among the area's highest-paying employers, which makes the economic "multiplier effect" of 425 layoffs even more devastating. He said every dollar spent by workers rolls over at least three times in the local economy.

"When these people get laid off they'll cut back on spending, much of which is in the Paducah area," he said. "That in turn affects restaurants, groceries and many other places where people spend money."

McCracken County Judge-Executive Danny Orazine said the layoffs are devastating not only to workers and their families, but to the community. The fiscal court will lose at least $250,000 a year in payroll tax alone based on the job cuts, he said.

"Our money was already tight and when you take another quarter of a million dollars out, it makes it even tighter," Orazine said. "We've been fighting and clawing and scratching to keep this plant going, and we're going to have to, to continue to keep it from closing."

- Sun staff writer Angie Kinsey contributed to this report.