The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Saturday, November 10, 2001

USEC plant salvation sought
The government apparently has ideas to save the Paducah jobs, even as the union awaits agreement on their contract.

By Joe Walker jwalker@paducahsun.com--270.575.8650

With a new deadline imminent for a labor agreement at the Paducah uranium enrichment plant, the Bush administration apparently is working on a plan to preserve the industry and the 1,500 Paducah jobs at stake.

Under a temporary agreement, plant operator USEC Inc. has until Thursday to submit a new contract proposal and outline to make the plant self-sustaining. Although the plant's largest union has received nothing from USEC, the union expects a response within the time left, said Donna Steele, president of Paper, Allied-Industrial, Chemical and Energy Workers (PACE) Local 5-550.

"Our international has said that date is firm and if it (proposal) is not here, we possibly will be on strike," she said. "They're not going to back up on the date we've got set."

Although no meeting is scheduled with the union, USEC spokeswoman Elizabeth Stuckle said the company wants to resolve the contract issues.

"Negotiations will continue," she said. "We've not reached a contract yet, but we're hopeful to do so. We recognize the deadline is tight, and we're going to work very hard with the union on the negotiations."

The union has been working under its old contract since Aug. 29 when it and USEC reached a temporary no-strike agreement designed to buy time for the Bush administration to resolve several major enrichment-industry issues.

White House officials have been studying whether the Paducah plant the nation's only uranium enricher should remain in business and if USEC should continue acting as sole agent to buy uranium derived from dismantled Russian nuclear warheads.

USEC says mixing the cheaper Russian material with the higher-cost material produced at Paducah is critical to extending the life of the plant, whose technology is outdated. The union agrees, but has balked at attempts by USEC to tie the contract to the Russian deal.

Company and union officials had hoped for a White House decision in September, when the nation's focus shifted to terrorism. However, enrichment talks have regained momentum in recent weeks.

Union officials met Wednesday with White House staffers. Among those attending were Leon Owens, vice president of the PACE local; James "Kip" Phillips, formerly of Benton, vice president of PACE International; and Phil Potter, a Washington, D.C., lawyer who serves as the union's policy analyst.

To prepare for the meeting, Potter wrote a summary of the Bush proposal. The Sun obtained a copy from a plant source. Although Potter declined comment, the summary which he wrote was "preliminary and could be inaccurate in some respects" clearly gives his views that the administration has primary and secondary plans to preserve the enrichment industry.

The main plan would give USEC the option to remain exclusive agent for the Russian uranium in return for specific commitments and milestones linked directly to the agency agreement.

USEC would have to submit a business plan including (1) continued operation of the Paducah plant for as long as 10 years at a minimum production level; (2) an immediate program to build a test plant, presumably at Portsmouth, Ohio, within five years and using European gas centrifuge technology; (3) plans to build a centrifuge plant, presumably at Paducah, within 10 years and using new U.S. technology.

If USEC is unable to run the Department of Energy-owned Paducah plant for the balance of the 10 years, the government would assume operation, contingent on support from Congress and the Office of Management and Budget, according to the summary.

The administration's fallback plan would generally allow the utilities industry, which opposes USEC's remaining sole agent, to start buying Russian uranium in a market-based approach. Although the result might mean the demise of USEC, the assumption is the government would run the Paducah plant to honor the 10-year commitment, the summary says.

Asked about Potter's summary, Stuckle declined comment, but acknowledged that USEC talks with the White House are ongoing. "We are in almost daily conversations with the administration.