The Paducah Sun
The Paducah Sun
Tuesday, October 17, 2000
Paducah, Kentucky

Rescue urged for Honeywell plant
Illinois' governor, a congressman and union are telling Congress that time is running out for the work force that converts uranium.

By Joe Walker
JOE WALKER/The Sun--Plant rally: More than 100 workers attended a rally Monday to support federal help for the Honeywell plant. In the foreground are, from left, Rep. David Phelps; Bob Winchester, deputy chief of staff for Illinois Gov. George Ryan; and Donald "Doc" Greer, president of the atomic workers' union.

METROPOLIS, Ill.--In the waning hours of Congress, U.S. Rep. David Phelps, Gov. George Ryan and the atomic workers' union have joined forces to lobby for federal help to save more than 250 jobs at the financially troubled Honeywell plant.

The Illinois delegation says time is running out for the Metropolis plant, which could close soon without government subsidy to offset perilously low prices for Honeywell's chief service, converting natural uranium into uranium hexafluoride (UF6) in the nuclear fuel cycle. Honeywell, which employs 330, also makes specialty chemicals, but more than 80 percent of its work force depends on UF6 production.

The plant is the only one in the nation that converts uranium. If it is forced to close, the country 23 percent of whose utilities rely on nuclear power will have to turn to foreign suppliers at a time when crude oil prices have soared, Phelps said.

"There is even more at stake here," he said, "and that is why I am especially surprised and disappointed at the lack of reaction in Washington."

On Monday, Phelps, D-Eldorado, and Ryan's deputy chief of staff, Bob Winchester, led a press conference at the plant, attended by more than 100 union and salaried workers, to pledge continued lobbying on Capitol Hill in the final days of the legislature. Clad in coveralls and standing in the rain, workers held homemade signs asking that the plant be saved.

At issue is Energy Secretary Bill Richardson's decision not to help Honeywell while pledging $620 million to save jobs at a Department of Energy-owned uranium enrichment plant in Piketon, Ohio. Phelps said he is glad Richardson has responded to needs there, but he can't understand ignoring the Honeywell situation.

He said it "makes no sense" to subsidize the enrichment phase of the fuel cycle and ignore conversion. Honeywell converts natural uranium into uranium hexafluoride, UF6, which plants at Piketon and Paducah enrich for use in nuclear fuel.

"What frustrates me is that this plan was announced without any consultation with myself or other interested members of Congress," he said, "and it completely ignores the conversion component of the fuel cycle, which is in equally dire need of assistance."

Honeywell workers, who are among the area's highest-paid union employees, average about 47 years old and 15 years of service. They ship UF6 to the 1,600-employee USEC plant near Paducah.

USEC Inc., which runs the Paducah and Piketon plants, will close the Ohio plant in June. Richardson said 10 days ago that he will funnel the $620 million to Piketon to save jobs by accelerating environmental cleanup work, keeping the plant in production standby and building a demonstration plant to enrich uranium by gas centrifuge.

To generate cash flow, slumping USEC is selling large amounts of more than $700 million in stockpiled UF6 that DOE gave the company when it was privatized two years ago. The atomic workers union, called PACE, says that over six years, USEC will sell the equivalent of three years of Honeywell plant production. That market flooding has driven the price for conversion services well below the plant's production costs, the union says.

Donald "Doc" Greer, president of PACE Local 6-669, and Bill Lessig, plant manager, said it is critical that Congress address the problem before it adjourns. The legislature is in session until at least Friday.

"If we have to wait another year," Greer said, "I fear we won't be here to talk about it."

The Metropolis plant's available new business has dropped dramatically since 1997, the year before USEC was privatized. Last year, the plant cut its work force by 50 employees and production by 25 percent. Sales of UF6 are expected to be down another 10 percent this year. Prices for new contracts are averaging 30 percent below what they were in 1999, which was 20 percent below what they were in 1998.

Lessig said the plant can't continue to run that way. He said he doesn't know how much life the facility has left, but a decision could be imminent.

"We are going to take a good hard look if nothing happens in Congress in terms of relief for this plant," Lessig said. "I think Honeywell has to re-evaluate its whole UF6 business here and make a decision."

Senior managers of ConverDyne, Honeywell's marketing arm, have asked the government for $15 million a year over the next three years, after which USEC inventory sales should slow. DOE officials think the $15 million is overstated, Phelps said.

He said he is ready to seek subsidies through year-end supplemental spending bills, but is waiting for ConverDyne and DOE to agree on the amount needed. Getting help may also mean amending the privatization law, which is vague whether $1.2 billion set aside when USEC was formed can be used for conversion or anything other than enrichment issues, Phelps said.

Winchester said Ryan is supporting the efforts of Phelps and other Illinois lawmakers through the governor's Washington, D.C., office. He said the delegation has strong allies in House Speaker Dennis Hastert, an Illinois Republican, and senators and representatives from Kentucky.