The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Wednesday, April 30, 2003

Despite lost jobs, USEC plans to cut costs
‘We will also seek to grow and diversify the company,' says president William ‘Nick’ Timbers.

By Joe Walker

USEC Inc. has cut employment 45 percent over the past five years and will seek more ways to reduce costs "in all areas of the company," said William "Nick" Timbers, president and chief executive officer.

"We are mostly done fixing the business," Timbers said Monday at an annual shareholders' meeting in Bethesda, Md. "Now we are intently focused on demonstrating the technology that we believe will set us apart and ahead of the competition for years to come. We will also seek to grow and diversify the company."

Since December 1998 — five months after it was privatized — USEC has eliminated about 330 jobs at the Paducah plant, now employing roughly 1,300. The company is cutting another 113 jobs this year after 87 workers took advantage of early-retirement incentives during the winter.

Nearly 1,200 jobs are gone at Piketon, Ohio, where USEC closed Paducah's sister plant in 2001. About 180 USEC workers still keep the plant in "cold standby" under a contract with the Department of Energy. USEC also has eliminated more than 90 jobs of people who work for both plants and nearly 50 jobs at its Bethesda headquarters.

Protecting jobs is an underlying factor in the 12-week nuclear workers' strike at the Paducah Gaseous Diffusion Plant, whose expensive, outdated technology will be replaced by gas centrifuge by the end of the decade.

USEC has said Piketon — where a test centrifuge plant will be built starting next year — has advantages over Paducah for a 500-job commercial centrifuge plant.

USEC said Tuesday that it has hired former Paducahan Ron Green to lead the new-technology program, called American Centrifuge. Born in Oak Ridge, Tenn., Green moved here when his father, a Manhattan project veteran, went to work at the Paducah plant.

Early in his career, Green was a manager for the Energy Department's gas centrifuge program at Oak Ridge and Piketon. Most recently, he was a divisional president for FPL Group, a leading Florida energy company.

Leon Owens, president of 635-member Local 5-550 of Paper, Allied-Industrial, Chemical and Energy (PACE) Workers International, spoke at the shareholders' meeting and later met with USEC executives and a few salaried and hourly plant workers.

He said the union anticipates losing roughly 100 more workers because USEC has made "no secret" about wanting to pare Paducah employment to about 1,100 within three years.

USEC, which lost $14.7 million during the last half of 2002 and is cutting expenses to remain competitive, is at odds with the union over health insurance costs, pension and work flexibility. Owens said the union has been unfairly criticized for striking as USEC and many other firms are struggling financially.

"People are saying the union needs to realize the plant no longer is a government-run entity," he said. "We recognize that, but the point people fail to consider is how many other private corporations have to rely on the federal government for agreements that allow them to have price arrangements with foreign countries, and to control pricing."

USEC is sole governmental agent for enriched uranium purchased from Russia as part of nuclear disarmament. The Russian material is much cheaper than Paducah's enriched uranium and helps USEC hold down overall costs. USEC has also benefitted by Commerce Department decisions resulting in tariffs on government-subsidized competitors that export to the United States.

USEC and PACE are trying to resolve differences in the estimated costs of an eight-year union contract offer. The company claims the cost is $40 million, compared with USEC's $12 million package. PACE says its proposal would cost $25 million, assuming there are no more layoffs.

Besides cutting costs and deploying cheaper gas centrifuge technology, USEC is trying to diversify by acquiring more cleanup work at Paducah and Piketon.