Friday, February 04, 2000
Uranium layoffs planned
850 to lose jobs in Ohio, Kentucky
BY KATHERINE RIZZO
The Associated Press
WASHINGTON — The company that runs America's uranium enrichment plants said Thursday it will lay off 20 percent of its work force, affecting 850 workers in Ohio and Kentucky.
The U.S. Enrichment Corp. has been wracked by problems because of a uranium price war and lower profits than predicted from a deal to buy up Russia's uranium stockpile.
USEC said it will keep both plants open, even though neither one runs at full capacity.
About 2,100 people work at the Portsmouth Gaseous Diffusion Plant in Piketon, Ohio, and 1,700 at the Paducah Gaseous Diffusion Plant in Kentucky. The company laid off 250 workers at each plant last year.
It will ask for volunteers before imposing involuntary layoffs, a move designed to save $39 million a year in production costs.
The layoffs are to be divided “ap proximately equally” between the two plants, the company said in a written statement.
The company said it also intended to reduce costs at its headquarters in Bethesda, Md., but no management layoffs were announced.
This was the latest in a series of retrenchments for USEC, product of a $1.9 billion privatization of a government entity.
The company has been suffering because of falling prices for enriched uranium, used to fuel nuclear power plants.
Its officials have long chafed under terms of a contract to buy uranium from Russia's missiles and then resell it to utility companies for use in their electricity-generating plants.
The “megatons to megawatts” arrangement had been widely hailed as a way to keep Soviet-era warhead uranium away from rogue nations and terrorists.
USEC has bought the uranium equivalent to 3,000 warheads, but the deal became less lucrative when the worldwide price of uranium started to fall.
The company spent last autumn in a fruitless negotiation with the Clinton administration for a $200 million subsidy to make up for profits expected but never realized from the Russian deal.
USEC threatened to pull out of the Russia contract but stayed with it amid a promise to renegotiate a market-based price. That negotiation continues, the company said Thursday.
USEC's stock price has been steadily falling.
It went public in 1998 at $14.25 a share. It closed Thursday at $5.75 a share, down 12 cents.
USEC said it will still pay investors a quarterly dividend but cut it to 13.75 cents, down from 27.5 cents. It also will buy back an additional 20 million shares of stock, for a total of 30 million shares, by June 2001.
The House Commerce Committee has been investigating a variety of issues stemming from the privatization of USEC. Chairman J. Thomas Bliley Jr., R-Va., has said he would schedule hearings early this year.
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Uranium layoffs planned
