USEC, needing to cut costs, cuts 50 salaried jobs
The first reductions will be voluntary as production costs rise at the gaseous diffusion plant.
Wednesday, August 17, 2005
USEC Inc. is offering voluntary reductions of at least 50 salaried jobs at the Paducah Gaseous Diffusion Plant to try to offset rising production costs, notably tens of millions of dollars in electricity. Announced Tuesday at the plant, the election period runs from Aug. 22 through Sept. 2, and the cuts will start Sept. 30.
Of the plant's 1,270 workers, 650 are salaried and more than 100 salaried personnel are eligible for full pension now, said company spokeswoman Elizabeth Stuckle.
She said the offer does not apply to salaried workers in security and information technology, or union employees, who make up the other half of the work force.
Stuckle said USEC won't decide whether to have additional reductions until it knows how many will choose to act during the initial period. Savings will depend on such things as how many higher-paid managers take the offer, she said.
"We're tightening the belt every way we can," Stuckle said. "This is just one of a number of ways to reduce operating costs."
Using outdated gaseous diffusion technology, the plant burns as much electricity as a major city to enrich uranium for use in nuclear fuel. Last year, USEC spent $305 million $25.4 million per month on electricity, accounting for 60 percent of production costs. That was despite record efficiency by plant workers and machinery.
Market prices for power have risen 45 percent since USEC signed a new contract with the Tennessee Valley Authority in 2000. Anticipating a big increase in power costs starting next June when the contract expires, USEC said it continues to explore cost-cutting measures and increasing efficiency.
USEC is negotiating a better deal with TVA, which last month raised rates 7.5 percent across the board. The increase is geared to generate about $524 million a year to help offset higher fuel prices and the rising cost of supplemental electricity TVA buys from other utilities. TVA also is under ongoing pressure from the Office of Management and Budget to reduce $25 billion in long-term debt. TVA has cut 728 workers through forced layoffs and incentives since early 2004.
USEC hopes to achieve many of its job cuts by lessening requirements for full or reduced pensions.
To receive a full pension benefit, employees must be at least 60 with a minimum eight years of company service, or be 48 or older with combined age and service totaling at least 83 years.
For a reduced pension benefit, employees must be between 48 and 59 and have at least eight years of company service.
Stuckle said the plan is being offered only to salaried employees because there were substantial reductions in hourly workers in 2003, first voluntarily through incentives and then involuntarily. USEC eliminated 220 jobs in 2003 when there was a five-month strike by the nuclear workers' union.
In the past, many displaced USEC workers have found jobs with Department of Energy cleanup contractors. Stuckle said that could happen again this time.
The Paducah plant, which has about 550 cleanup workers, is scheduled to close starting in 2010 as USEC opens a $1.5 billion plant in Piketon, Ohio, using less energy-intensive gas centrifuge.