The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Thursday, February 14, 2002

Paducah gains jobs, becomes self-contained in USEC merger
The shipping will be done in an area where Paducah workers shipped cylinders of enriched uranium to Portsmouth.

By Joe Walker jwalker@paducahsun.com--270.575.8650

Starting this summer, the Paducah Gaseous Diffusion Plant will gain as many as 50 employees and be fully self-contained now that USEC Inc. has decided to merge transfer and shipping operations here.

The Bethesda, Md.-based company said Wednesday it will save $40 million annually by moving the operations from its closed enrichment plant near Portsmouth, Ohio. The savings, realized gradually over the next three to four years, will be through net job cuts and lower overhead, utilities and materials costs.

USEC said the change will begin in April and be completed this summer at an approximate cost of $29 million, including about $13 million to upgrade the Paducah plant. The shipping work will be done in an area where Paducah workers have traditionally shipped cylinders of enriched uranium to Portsmouth.

The rest of the expense will be in training Paducah workers and providing severance and other benefits for Portsmouth workers. About 440 Portsmouth jobs — about 230 hourly and 210 salaried — will be eliminated from roughly June through November out of the plant's approximately 1,350 employees.

Company spokeswoman Elizabeth Stuckle said 30 to 50 jobs, including salaried and hourly positions, will be created at the 1,500-employee Paducah plant. Members of Paper, Allied-Industrial, Chemical and Energy Workers (PACE) International at both plants will be able to bid on the hourly jobs, she said.

"We regret the impact this action may have on our Portsmouth employees, but it is a necessary action to lower our operating costs," said Morris Brown, USEC vice president of operations. "We will work with PACE concerning this action."

The Portsmouth plant closed last May amid USEC attempts to right itself financially. That left Paducah as the nation's only enrichment facility, but the plant has continued to ship cylinders to Portsmouth for final processing before they are sent to nuclear fuel fabricators.

"This means that this summer, the Paducah plant will become fully self-sufficient," Stuckle said.

Leon Owens, president of Paducah PACE Local 5-550, said the decision was bittersweet.

"We, of course, don't relish the thought of Portsmouth workers losing their jobs, being phased out of shipping and transfer," he said. "At the same time, it does mean continued operations at Paducah with shipping and transfer being consolidated here. The job increase will be welcomed also."

Owens said Portsmouth workers had "an unparalleled record" of shipping quality and on-time deliveries. "That will be something that Paducah will have to strive to duplicate because that's a perfect record and the union congratulates them on that."

Last summer, USEC said it would be four years before the shipping work would be moved. Stuckle said the faster schedule is based mainly on cost savings and improved efficiency.

The shipping issue has been controversial as the General Assembly weighs a bill to exempt the state sales tax from uranium produced at Paducah. Northeastern Kentucky lawmakers worried that passage of the bill would speed plans to cease shipping operations in Portsmouth, across the Ohio River from Ashland.

About 38 of the Ohio plant's workers live in Kentucky, but Stuckle said the move would not result in the loss of that many jobs in the Ashland area. She said some of the 38 work in other areas of the plant and those employed in shipping could transfer to other jobs if they have seniority over other workers.

Ohio doesn’t tax enriched uranium, and western Kentucky lawmakers want to give USEC the same benefit because of the shipping transfer to Paducah. The exemption would save USEC and its customers about $5 million a year, Stuckle said.

If the bill fails, USEC has options, one being to ship all cylinders in bulk to fuel fabricators, which avoids the sales tax. About 92 percent of current shipments are exempt because they go directly to fabricators.

USEC is taxed on about 8 percent of its enriched uranium because of customers' preference to take title of the material at the USEC plants, rather than at fabricators.