The Paducah Sun

March 7, 2000

Volunteers sought in USEC cuts

By Joe Walker
Sun Business Editor

Voluntary severances at the Paducah Gaseous Diffusion Plant will begin next month to eliminate about 425 jobs this year, dropping employment from 1,700 to 1,275.

Financially troubled USEC Inc. disclosed the schedule in handouts to employees as they arrived at the plant Monday morning and to the Department of Energy at a workshop in Cincinnati. Jim Adkins, USEC vice president of operations, said in a memorandum that the company developed "best estimates" for job reduction in the workshop, which is independent of the announced layoffs.

Although USEC concedes many involuntary job reductions probably will be needed, Adkins' memo did not address them. But USEC spokeswoman Elizabeth Stuckle said standard company severance packages will be offered to all terminated workers, regardless of whether they choose to leave.

"The only difference may be whatever enhancements the Department of Energy offers for voluntary layoffs," she said.

Chances for added benefits are cloudy at best. Projected funding is insufficient to continue the payments, which would require about $25,000 more per worker, according to a draft work-force restructuring plan released by DOE a month ago. There may be enough current and requested funds to provide a lump-sum cash benefit rather than enhanced benefits, the plan said.

USEC previously cut 192 jobs at Paducah through voluntary layoffs, the plan said. About 90 percent of those chose a lump-sum cash benefit, and the average severance benefit was more than $40,000 - "substantially more" than at other DOE plants. Those payments came from a $20 million fund passed from USEC to DOE when the company was privatized.

During previous cuts ending last year, 474 workers were laid off voluntarily at Paducah and its sister plant near Portsmouth, Ohio. The breakdown included 308 salaried and 164 hourly workers.

Now USEC is eliminating another 850 jobs at the plants, trying to boost sagging profits and stock value. Adkins' memo estimated that 9 percent to 12 percent of the cuts will be managerial, 44 percent to 50 percent salaried nonmanagerial, and 40 percent to 48 percent from the plant's atomic workers' union, which represents about half the work force. This round of cuts will hit the union harder, considering that about 35 percent of previous layoffs were union employees.

Individuals "at risk" for layoffs will be tentatively identified by mid-April, the memo said, after which voluntary reductions will begin.

Starting with functional managers and working down through the organization, USEC is deciding what jobs and skills are needed to run the plant. According to the DOE plan, cuts among salaried employees are typically made based on performance, relevant education and training, possession of critical skills, how well skills transfer and company service. Among hourly employees, cuts are made based on seniority in various job classifications.

Employees typically receive severance pay based on company service. The range of severance pay at Paducah - based on five to 30 years' service - is three to 26 weeks' pay for union workers and 4.3 to 30.4 weeks' pay for salaried workers, the plan said.

Adkins' memo said those with at least five years' service have vested pension. Workers 50 and older and with at least 10 years' service are eligible for post-retirement medical benefits.

All terminated employees may continue medical and dental insurance coverage for 18 months under the Consolidated Budget Reconciliation Act (COBRA) and convert group life insurance to individual policies. USEC may consider early retirement for some workers, depending on many factors including skills mixes and the number of probable applicants, the plan said.

After the latest reductions, employment will be down about one-third from when USEC became a privately held corporation two years ago. Adkins' memo said the firm wants to help displaced workers find jobs through DOE's transition program, but says there are no agreements that apply to this round of cuts.

Anthony Hulen, press secretary for 1st District U.S. Rep. Ed Whitfield, R-Hopkinsville, said Whitfield has talked repeatedly with DOE to move as many displaced USEC workers as possible into government cleanup work.

The worker transition plan estimated that $11.3 million in DOE-requested funding will create about 100 environmental cleanup jobs at Paducah and perhaps 200 or more jobs by next year. It also said 325 jobs could result during the next three years from efforts of the Paducah Area Community Reuse Organization (PACRO), although members of that group have privately questioned the size and justification for those figures.

Last July, DOE approved a $6 million grant to help PACRO find ways to offset job losses at the plant through small-business development and a variety of other measures. The group is expected to request $8 million this year and $6 million next year to continue its work, including existing industry programs and added costs to develop industrial parks. Approval depends on the availability of DOE funds.