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Saturday, April 26, 2008

Living In A Fantasy World

George H. Miller: Positioning Livermore Laboratory for the future
By: George H. Miller
Article Launched: 04/25/2008 11:01:50 PM PDT

THE LAWRENCE LIVERMORE National Laboratory (LLNL) has gone through many changes throughout its 56-year history — and a constant always has been our exceptional science and technology. From providing solutions to our nation's defense, energy, environment and economic security issues, our Laboratory — along with other Department of Energy (DOE) facilities — is truly a center of excellence with unequaled scientific, technical and engineering capabilities. The laboratory owns a history I have been proud to be associated with — and a future that I am convinced will continue to be bright.

The last year has been a challenge for the laboratory because of the overall budget situation in the country and the recent contract/management change. I'd like to share with you my perspectives on the future and on what's happening and why.

Because of the wise investments by Congress, DOE and its predecessor agencies over the years, LLNL and the other DOE national security laboratories have been incredibly successful in the service of our country.

Our laboratories helped toward winning the Cold War, and, for the last 15 years, we've been able to maintain an ever smaller nuclear stockpile without nuclear testing. It is noteworthy that the stockpile will soon be the smallest since Dwight Eisenhower was president of our nation. Our laboratory, along with others, has led successive revolutions in supercomputing and laser technology and in the development of capabilities that led to the sequencing of the human genome.

We are confronting the problems of nuclear proliferation and terrorism, as well as helping to understand and mitigate the effects of human activity on the environment. And now our laboratory is on the verge of accomplishing something that has eluded the scientific community for 60 years — fusion in the laboratory. This technology may be developed into a source of limitless clean energy for humankind in the future.

While I believe we are on the right path to achieve even more accomplishments, I am also concerned that the nation's financial investments in science may not be able to keep pace.

We all are aware of the economic stress on the country. We've seen the effect on many key industries — industries once thought to be immune to normal economic indicators. The reality is that our laboratory is no different. A constrained federal budget environment does affect our laboratory.

Let me explain how:

The lab's current fiscal year began on Oct. 1, 2007 — the same day our contract changed from public to private management. From a budget perspective, several things converged to create a very difficult situation.

The federal government reduced the 2008 fiscal-year funding for the laboratory by $100 million, and we had to absorb the substantial effects of inflation — $50 million this year alone.

The conversion in the management contract from a large public sector employer (University of California) to a small private sector company (Lawrence Livermore National Security, LLC, also known as LLNS ) brought an additional $85 million in annual costs (taxes and benefit expenses).

In addition, approximately $45 million in increased management fees and expenses is being paid to the new company. Altogether, the laboratory is now dealing with a very real $280 million deficiency.

Throughout our history, the laboratory has had the flexibility, agility and skills to serve the needs of the country and to also deal with some previous financial challenges — but none has been this large.

The reality of all costs converging at one time required aggressive actions. In October 2006, the laboratory's total career and flex-term employee population was 8,880. Since then, we have been reducing the workforce through a combination of normal attrition, voluntary and involuntary separations. Approximately 1,500 people have left the laboratory over the past two years and we have just announced a reduction of up to 535 members of our career workforce.

The decision to move forward with the involuntary reductions was a difficult one that weighed heavily on my mind because of the valuable contributions these employees make and the significant consequences to the individuals and the laboratory.

In the end, we all have to balance our budgets and I decided to move forward to prepare the laboratory for the future in a manner that I believe is both prudent and strategic.

Simultaneously, we are taking other budget-related actions. Drawing on the expertise of the LLNS corporate partners (Bechtel, UC, Babcock & Wilcox and the Washington Division of URS), the management team has initiated a complete organizational review and has begun implementation of a more effective service delivery model.

This approach already has saved nearly $10 million in non-labor expenses. Completion of this process over 12 to 18 months will result in a laboratory that can more cost effectively and efficiently fulfill its mission: to provide exceptional science and technology to help solve the nation's most important challenges in global security, energy and environment and economic competitiveness.

For the past 56 years, Lawrence Livermore National Laboratory has applied multidisciplinary science, engineering and technology to meet urgent challenges in national and global security. I believe the opportunities ahead — both scientifically and operationally — are even brighter.


But it will require hard decisions, perseverance and patience by all of us, along with the implementation of necessary operational efficiencies. I believe that the end result — world-class employees working at a center of excellence — for the San Francisco Bay Area, the nation and the world — is well worth it.

Miller is director Lawrence Livermore National Laboratory.

10 comments:

Anonymous said...

Now that the Contra Costa Times has allowed Miler to blow smoke up your crack please take the time to listen to the April 16th Energy and Water Hearing on the side bar to the right of the root page. You can skip the first hours of politically correct tap dancing and just listen to 2:00:00 forward. Pay close attention what is said, who gets blamed for their mistakes and the real cost in dollars and people lives. The realize we're going to do this next year all over again.

Anonymous said...

"The reality of all costs converging at one time required aggressive actions. In October 2006, the laboratory's total career and flex-term employee population was 8,880. Since then, we have been reducing the work force through a combination of normal attrition, voluntary and involuntary separations. Approximately 1,500 people have left the laboratory over the past two years and we have just announced a reduction of up to 535members of our career work force."

Why does Miller always fail to tell the newspapers about the additional 180-200 term and contracts employees that'll be leaving on top of this 2,035, plus his little scheme of letting up to 50 people every thirty days go out the gate without reporting it. On top of that there's a RIF coming at NIF of another 100 or so people EM doesn't need anymore in or around September of this years. When I add these numbers up, my count says the labs population should be ~ 5,200 by Oct of 2008.

So if we dump another 2000 in FY-09 because of a bad budget we'll be down where we might be able to survive. LLNL should be at 3,200 by then if they don't hire anyone. That of course would be asking way to much. They'll probably hire mostly professional FTE or a lot of low paid contract employees whom they've promised the world to from the east cost, where these employees so foolishly looked at their wages doubling think to themselves how great that will be. Soon after they accept the job they'll realize they'll still be living in poverty and unable to buy a home in the local area. With gas at $4.00 a gallon they'll need an additional $2000 a month before taxes to pay for their commute from any surrounding area that MAY be affordable. Come on guppies. Come to the golden state, the land of opportunity.

How can Miller and company think LLNL isn't going to suffer another 10% hit in FY-09 budget with a ( $4B a week ) debt for the war being accumulated. The congress and senate can't just keep printing money and going in debt without starting to pay this debt down NOW. For now the way they're going to do this is to cut everything across the board and fire more people.

This strategy falls right in line with LLNS SOP forte wouldn't you say?

Anonymous said...

"Altogether, the laboratory is now dealing with a very real $280 million deficiency. "

"I believe the opportunities ahead — both scientifically and operationally — are even brighter."

Can anyone show me another CEO of a private company that would make these two statements in the same talk? Anyone?

I go to work everyday trying to be positive about LLNL, but it looks like ULM lives in a far different reality than mine where I'm being told to implement the specific ideas LLNS made in their bid proposal and multi-year strategy for my group's operations - but with no additional resources or budget.

Anonymous said...

What a crock of poop. I really feel sorry for GM, he's had to make some "difficult decisions." "Oh, we got surprised, overtaken by events, we didn't know...blah, blah, blah." A $280M overrun, oversight, oops, call it what you will, is either the result of misrepresentation (if they really knew beforehand) or gross incompetence (if they really got caught unaware). Neither is a particularly pretty picture. These corporate stiffs were supposed to know how to run the place BETTER, and they are continuing to be well-paid even though they aren't dong that (quite the opposite, in my opinion). A mistake that large usually costs CEOs their jobs. But in this case, GM and his ULM buddies are crying the blues like they are the victims, all the while collecting their large salaries, bonuses, etc. and their corporate masters are laughing all the way to the bank, reaping the profits of their malfeasance or incompetence. And the solution is being borne on the back of the Lab's workforce (although the books may balance, what about the workload and related quality...it's got to suffer at some point). Where's the accountability here? Why isn't there a Congressional investigation? Heck, Congress sends out the GAO on program/project witch-hunts all the time; LLNL and LANL have seen their share. So where's the Congressional investigative arm when LLNS management needs some attention for a real problem and waste of taxpayers' money? Curious? Not really. It's just more of the same we've come to expect, ULM in bed with their corporate masters and the sound-bite driven two-bit politicians they pander to, while the people who do the real work are either sent down the road or forced to work under intolerable conditions. Makes one proud to be an American. (I wasn't there, but I expect the Manhattan Project wasn't run like this......Lawrence and Oppenheimer et al. must be spinning in their graves....)

Anonymous said...

Miller in the article and his Congressional testimony gives the false impression that most of the cuts were due to NNSA downsizing of the weapons complex. But in fact most of the $300M shortfall is due to expenses that either were or should have been anticipated, especially after NNSA's previous experience with LANL's transition.

A lot of newspaper articles gives this wrong impression also. Most of the costs were due to state taxes due to loss of tax-exempt status, extra health insurance costs, ULM management fees, and extra costs due to transfer of retirement benefits. All of this could have been avoided by setting up non-profit organization in conjunction with UC along with industrial management.

Conclusion: most of the extra costs are not due to downsizing of the weapons complex, but this reason is being used as an excuse for public consumption.

Anonymous said...

Another bogusity being promoted by Miller, et al:

We've saved $10M in non-labor expenses. Well I can "save' money, too, if I never take my car in for service. But at some point, the car will break down, and then the "savings" doesn't look so good when I either have a huge repair bill or must purchase a new vehicle.

If you look at the slides from Miller's presentation, you can see where some of these savings come from:not getting new office computers and peripherals, not getting new office furniture, etc. While this might seem great in the short term, they will eventually need to "catch up" on what they refused to replace. Either that or, coupled with Liedle's "let the plant show some wear and tear" philosophy, LLNL will become a very unattractive place at which to try to work. Maybe they can get back some of those old metal battleship or big wood desks we used to have. Should be real cheap by now.

Anonymous said...

We're truly living in a fantasy world when we can't even get the information we need to plan our futures from management. Has anyone seen this request to ULM for data. Funny how important issues like this get buried so quickly out here in cyber space

A Request For Simply Known Data

Anonymous said...

I hope everyone took note of the 3161 Q&A found on the side bar especially the miscellaneous section where everything they cared to ignore was placed. tear them up boy and girls.

Anonymous said...

Question # 127 is good

On page 3 you mention Obligations under executive order 11246 to scrutinize proposed restructuring with minorities and other protected classifications.

However, from what I have seen, Retirees were specifically targeted to be let go, so let’s be consistent here. Maybe you need to just remove those lines.

Anonymous said...

"Can anyone show me another CEO of a private company that would make these two statements in the same talk? Anyone?"

Verbatim, no. But in spirit it happens all the time. Just look at the press statements of most any corporation that is 'restructuring'. Part of the CEO's role at that stage is to not start a stampee toward the door by either customers or employees.

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