Plant decision speeds up changes
An era in Paducah history came to an end Monday, with the announcement that USEC Inc. will build a gas centrifuge plant in Portsmouth, Ohio.
The news was disappointing but not unexpected. Although local and state officials aggressively pursued the $1.5 billion project, hoping to keep USEC in Paducah, they were well aware that the Ohio site had several key advantages.
Two decades ago, the federal government spent $3 billion in Portsmouth, in an abortive effort to develop centrifuge technology. The residue of that project — most notably, a large building designed to house gas centrifuges — gave Portsmouth a significant head start over Paducah.
Further complicating Paducah's bid to land the plant was the cost of building the facility in a seismic zone. The New Madrid Fault hasn't produced a major earthquake in almost 200 years, but the need to reinforce the centrifuge buildings against the possibility of a big quake was a factor in Portsmouth's favor.
The Paducah plant's history of efficient operations impressed USEC officials. In the end, however, the quality of the western Kentucky-southern Illinois workforce — and the community's strong and consistent support for the uranium enrichment industry — weren't enough to put Paducah over the top.
Now western Kentucky must prepare for a future without one of the area's largest employers. When the Portsmouth centrifuge plant opens in 2010 or 2011, the Paducah facility will shut down.
In the early 1950s, the opening of the Paducah Gaseous Diffusion Plant helped to usher in the Atomic Age. The plant was a key part of the nation's defense industry and the anchor of western Kentucky's economy, providing more than 2,000 top-notch industrial jobs
By the time USEC decided to move to the next generation in uranium enrichment technology, the nuclear industry and the Paducah area had undergone major changes.
The former government facility was privatized in 1998. Since then USEC, struggling to maintain its position in a changing world market for processed uranium, has shut down its Portsmouth gaseous diffusion facility and eliminated more than 600 jobs in Paducah.
Within the next few years, the number of workers employed in cleaning up the Paducah site will exceed the number of plant employees.
In fact, the cleanup in Paducah will require a larger workforce — about 700, after a uranium waste conversion facility is built on the site — than the Portsmouth centrifuge plant.
The cleanup jobs are temporary, but a realistic estimate is that it will take at least 15 years to remove most of the contamination from the site.
In effect, western Kentucky has a double cushion against the impact of losing USEC — the length of time required to build the centrifuge plant and the cleanup operation, which provides jobs that compare in pay to the USEC jobs.
It's important to note that the economy of the region is not as dependent on the enrichment plant as it was 20 years ago.
The fact the local job market has absorbed the job losses at USEC and remained relatively strong bodes well for the future.
Unquestionably, community leaders would rather face the future with the centrifuge plant than without it. But Portsmouth's gain does not spell disaster for western Kentucky.
The region is entering a period of economic transition, much as it did in the early 1950s.
During the 1950s heavy industry became the backbone of western Kentucky's economy, replacing agriculture.
But the economy is a living, changing organism. In the shadow of the factories, the Paducah area began to grow new types of businesses. The health care industry emerged as a major employer. Retailers thrived on changing lifestyles and the increased mobility of consumers. The river industry strengthened its traditional position in the region's economy.
In the computer age, diversification is the most important sign of economic health. The area's economy has diversified, but it needs to continue to grow and add more good employers.
Local officials have worked hard to develop industrial parks and other incentives for industries to locate in the region. In time these efforts should begin to pay off.
It's unlikely, however, that the region will be able to depend on a few major employers. The next era in Paducah history will be shaped by the area's overall economic climate, not by the decisions of a handful of corporate officials or political leaders.