More than 100 jobs terminated as B&W work on USEC centrifuge project ends

But hundreds of jobs maintained in Ohio and Tennessee, USEC says

Babcock and Wilcox has terminated the employment of more than 100 workers who had been involved in the American Centrifuge project with USEC, and Monday was the last day of work for most of them, a spokesperson said.

“B&W’s involvement in the American Centrifuge Manufacturing LLC has transitioned fully to USEC, which will result in the termination of all 122 employees B&W had engaged in the effort,” said Aimee Mills, B&W media relations lead.

Mills said roughly 25 employees will be released during the next two months as the “final steps of demobilization take place” on the advanced uranium enrichment project, which has included centrifuge manufacturing in Oak Ridge and the American Centrifuge Plant in Piketon, Ohio.

“Some of those affected have been reassigned within B&W,” Mills said. “We have also provided assistance by way of job fairs and workshops to update resumes.”

Meanwhile, USEC has notified a small group of its Oak Ridge employees who worked on manufacturing activities that they would be laid off, Communications Manager Jeremy Derryberry said Tuesday. Several were transferred to other parts of the centrifuge program.

Several hundred USEC and B&W workers had received 60-day notices in March that they could be laid off. The so-called WARN notices expired Monday. They were issued to 122 B&W employees and 400 USEC workers, including 174 in Oak Ridge.

USEC, which supplies enriched uranium fuel for commercial nuclear power plants, had previously performed research, development, and demonstration work on the uranium enrichment project, the American Centrifuge Project, under an agreement with the U.S. Department of Energy. That cost-sharing agreement had been in place since June 12, 2012, but it expired April 30.

USEC previously had a joint company with B&W, but it is now an Oak Ridge National Laboratory subcontractor.

The work has been deemed important for national security and possible commercial use, and DOE is now exploring its options.

In the meantime, USEC and UT-Battelle, which manages ORNL, are expected to preserve the centrifuge enrichment capabilities on an interim basis. The two companies have signed a $33.7 million, five-month contract to continue operating centrifuges and conducting research and development activities.

USEC Inc., the parent company, announced a Chapter 11 bankruptcy filing and financial restructuring plan in March. The American Centrifuge program had successfully completed all 10 of its technical milestones, but the commercial market has been troubled by a drop in demand for enriched uranium after the 2011 meltdown of three reactors in Fukushima, Japan, caused by a tsunami. USEC has previously said there are now 50 reactors not operating in Germany and Japan, as well as a glut of natural gas on the market.

The new agreement with UT-Battelle, which manages Oak Ridge National Laboratory, was signed May 1. The five-month term ends Sept. 30. The new agreement includes options for two six-month extensions valued at about $41.7 million each. The total price of the contract with the options is roughly $117 million.

Derryberry said USEC has more than 150 workers involved in the American Centrifuge project in Oak Ridge today and more than 390 companywide.

He said the new fixed-price contract with UT-Battelle—the American Centrifuge Technology Demonstration and Operations, or ACTDO, Agreement—builds on the success of the previous centrifuge demonstration program, preserves a reliable and economic domestic uranium enrichment capability for national security, and promotes future private sector deployment.

“Under the agreement, we will continue operations at USEC’s demonstration facility in Ohio, continue operations at our test facility in Oak Ridge (K-1600), and continue core technical work on the American Centrifuge technology in Oak Ridge,” Derryberry said. “As a result, hundreds of jobs in Tennessee and Ohio have been maintained.”

But, he continued, the scope of work under the new contract is about 60 percent, on a dollar basis per month, of the scope of work previously funded under the RD&D cost-share cooperative agreement between USEC and the Department of Energy.

“The reduction relates to certain engineering, procurement, and construction activities, and work related to the manufacturing of new centrifuge machines, resulting in layoffs at the manufacturing center that will affect a majority of the employees of USEC and B&W involved in machine manufacturing,” Derryberry said.