Honeywell Layoffs 2017: UF6 Demand Declines Post Fukushima, 170 Jobs Affected at Metropolis, IL Plant

Honeywell Layoffs
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Honeywell International Inc. (NYSE:HON) has announced another round of layoffs at its facility in Metropolis, Illinois. The multinational conglomerate said it will be laying off 170 employees and an unnumbered amount of contract workers at its uranium hexafluoride (UF6) processing facility.

Honeywell is idling production of UF6 at the site due to a worldwide oversupply of it. The demand for UF6, which helps produce fuel for nuclear reactors and nuclear weapons, has dwindled in Japan and Germany, especially since the Fukushima disaster in March 2011. This has resulted in a large number of broader nuclear industry layoffs.

Temporary Closure and Workforce Reduction at Honeywell’s Metropolis, IL Plant

Honeywell announced that it is temporarily closing its Metropolis, Illinois plant as it deals with an oversupply of UF6 at the site. Honeywell’s Metropolis facility is the only plant in the country that converts uranium ore into uranium hexafluoride.

There are 200 full-time employees at the facility; the move will result in 170 of them being laid off. The downsizing includes 81 union positions and 86 salaried positions, as well as an unknown number of contractors.

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According to the multinational, “minimal operations” will be maintained for a restart if business conditions improve. This is not expected to happen until at least 2020.

Below is the full statement from Honeywell:

“The nuclear industry continues to experience significant challenges and is currently oversupplied with UF6 worldwide. In particular, the decrease in demand in Japan and Germany following the Fukushima disaster has had a significant impact on the industry and continues to create an over-supplied market for the uranium fuel cycle, and a downward trend in the uranium markets. According to analysis from Energy Resource International, since Fukushima, global demand for nuclear fuel has dropped 15 percent, with demand not anticipated to rise before 2020.”

“As a result of this business outlook, Honeywell plans to temporarily idle production of UF6 at its Metropolis site, while maintaining minimal operations to support a future restart should business conditions improve. Because of this, the company intends to reduce the full-time workforce at the plant by 170 positions, as well as a number of contractor positions. Honeywell intends to restart once business conditions improve and will keep the plant in a state of readiness and continue to support minimal on-site operations to ensure a successful restart.”

The mass layoffs in Metropolis, Illinois are a huge hit to the small town of 6,200. Metropolis Mayor Billy McDaniel said it will affect the entire town as most of the laid-off employees will need to find work elsewhere. Lost jobs in Metropolis will result in fewer tax dollars coming in. This will not just hurt the local economy, but it will also cause funding for repairs and upkeep in the town to go down.

Honeywell January 2017 Layoffs at Metropolis, IL Plant

This is not the first time in 2017 that Honeywell has announced layoffs in the small town of Metropolis. Back in January, it let go of 22 full-time employees and 44 of the plant’s contractor team. This represented 18% of the company’s workforce.

The reasons for the layoffs sound familiar; Honeywell initiated its first round of layoffs in 2017 due to an oversupply of UF6. The permanent layoffs were implemented throughout the first quarter.

Previously, a support page on Facebook was created entitled, “Support for Honeywell Workers-Metropolis, Il.” The Facebook page is operated by the union on behalf of its members employed at Honeywell.

Commenting on the January layoffs, the union noted, “Today, Honeywell announced a significant “restructuring” of the Metropolis facility. It will affect a total of 69 employees including salary, hourly, and contractors. Most Union employees will be affected somehow and as many as 6 will laid off from the facility. Details are scarce at this time…”

Nuclear Industry Layoffs in 2017

A market saturated with UF6 has resulted in a number of nuclear industry layoffs in 2017. Earlier in November, Babcock & Wilcox Enterprises Inc (NYSE:BW) announced job cuts after posting two consecutive quarters of losses. The layoffs at Babcock and Wilcox will affect nine percent of its workforce, or around 4,700 employees.

The nuclear power company has struggled in 2017; since the start of the year, the company’s share price has tumbled close to 75%.

In September, Westinghouse Electric Company LLC CEO José Emeterio Gutiérrez, confirmed that the Pennsylvania-based electrical and nuclear energy giant will gut 1,500 employees before the end of March 2018.

In July, Westinghouse warned of mass layoffs, indicating that it would be cutting seven percent of its workforce worldwide. At the time, the company had 12,000 employees, so that worked out to around 840 layoffs. The newly confirmed layoff number is almost double that.

 

Sources

Statement from Honeywell,” Honeywell International Inc., last accessed November 21, 2017.

Honeywell to ‘reduce workforce by 170 positions;’ temporarily idle Metropolis, IL site,” KFVS, November 20, 2017.

Support for Honeywell Workers-Metropolis, Il.” Facebook, last accessed November 21, 2017

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