The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Friday, March 29, 2002

Jobs tied to USEC question on taxes
A Paducah union leader relates the prospect of job cuts at the plant to the effort on exemption from state sales taxes.

By Bill Bartleman

FRANKFORT, Ky.--The president of the union representing production workers at the Paducah Gaseous Diffusion Plant says USEC Inc. is planning more job cuts in a couple of months.

Leon Owens, president of the Paper Allied-Industrial Chemical and Energy Workers Local 5-550, said the prospect of job reductions is another reason the union is opposing a bill that would exempt enriched uranium produced at the plant from the state's 6 percent sales tax.

Owens thinks the tax break should be tied to commitments from USEC, which he says the company won't make. He said the union is willing to remove its opposition if the exemption is tied to commitments for future jobs.

USEC spokeswoman Elizabeth Stuckle said the focus at present should be on the tax exemption and not other issues. Granting the exemption would save the company and its customers about $6 million a year.

"This is a tax issue, and we need to stay focused on the tax issue at this time," she said when asked about Owens' concern that additional job cuts may be planned.

Paducah lawmakers said the prospect of granting a tax exemption is troubling if there are plans to cut jobs in the near future.

Sen. Bob Leeper, R-Paducah, said lawmakers don't want to interfere with management decisions but felt it would create a bad public perception if the state gave a tax incentive without something in return from the company.

Rep. Frank Rasche, D-Paducah, said he also is concerned about the loss of jobs and about interfering with issues that can be resolved by only the union and the company. Rasche, Leeper and Rep. Charles Geveden, D-Wickliffe, said they didn't want to take sides on the issues between the union and company and were waiting for them to reach an agreement before moving the tax exemption legislation.

Rasche and Leeper said they've been told by the union that as many as 100 jobs may be at stake.

Asked for details of what jobs cuts are planned, Owens said, "I'll have to refer you to the management out here (at the plant) to see if they'll shed some light on it." USEC, re-emphasizing that its focus was on the tax issue, has not commented.

Owens said the job cuts will be tied to additional efforts by USEC to be "more productive ... When the company looked for ways to be productive in the past, they shut down the Portsmouth plant, they laid off workers in Paducah, and they eliminated 440 jobs at Portsmouth by moving the shipping and transfer operation. The only facility remaining is in Paducah, and the only way they can cut costs is to cut jobs in Paducah."

He said the union wants to ensure the future of the plant and help make the operation efficient, but he said there may be other factors related to the company's financial condition. He said past efficiency efforts haven't improved the company's financial picture. He said stock prices remain low, and analysts continue to rate USEC stock as a bad investment.

Owens said USEC has indicated that it may try to cut jobs by offering early retirement incentives. "When incentives were offered in the past to people close to retirement age, the packages they were offered were not attractive enough to allow enough people to take them."

He said there are about 670 hourly union workers at the plant, down from about 875 three or four years ago. There also are 130 union members working in environmental management, he said.

"Within the hourly ranks right now in operations, maintenance and support groups, it is just about as bare-bones as it can be," Owens said.

He said, however, the employment level remains "well above" what is required by the Nuclear Regulatory Commission to ensure a safe operation.

He said reaching that level, however, would eliminate the flexibility management needs to run the plant and would create shortages in many positions if workers were sick or on vacation.