Livermore lab job losses a blow to area economy

This article sums up what most of us feel. I suggest you copy it and send it to your congress people using the link on the side bar titled: "email all your congress people in 1 shot"

Contra Costa Times

Livermore lab job losses a blow to area economy
MediaNews editorial
04/19/2008 11:04:33 PM PDT

The corporate management of the Lawrence Livermore Laboratory, which began Oct. 1, is not working. For the third time this year, the staff is being reduced to the point that the future of the lab is in jeopardy.

In May, the new lab management contract for a consortium of private businesses led by the University of California and Bechtel Corp. was announced amid much optimism.

Lab director George Miller predicted a smooth transition. He said new efficiencies, attrition and other changes would save enough revenue to prevent layoffs.

He was dead wrong. Slightly more than a month after the consortium took the helm of the lab, it announced 500 layoffs of temporary and support employees, which took place in January.

In March, 215 permanent employees took buyouts. Others retired or left and were not replaced. In fact, 900 employees, most of them highly skilled, have left the lab this year. But it still isn't enough, according to Miller.

The latest announcement of staff reductions was made Tuesday. As many as 535 more employees could be cut. This time the layoffs would be involuntary and would affect permanent career employees.

What went wrong with predictions of no layoffs? The most benign answer is that the consortium simply underestimated the increased costs associated with corporate management.

Originally, the corporation formed by UC, Bechtel and several other companies to run the lab expected about $80 million in increased costs. The actual cost increase is $280 million. So much for efficiency or accuracy in financial projections.

Most of the additional costs — $200 million — is the result of the lab's loss of the tax-exempt status it had under UC management.

The yearly management fee was increased from $8 million to $46 million. Also, retirement and health benefit costs have been higher than estimated.

We are a bit skeptical that a supposedly skilled management team could be unintentionally so far off in estimating increased costs, especially considering the size of the cost of losing tax exemptions. It is also suspicious that so many staff reductions have come so quickly.

We were supportive of the management changes in the wake of security lapses and financial errors at the Livermore and Los Alamos labs, which were run solely by UC.

However, with such rapid shrinkage of the Livermore lab's staff, we now have cause to think the federal government made a mistake in seeking bids for new management instead of pushing for changes within UC's managers.

The loss of so many skilled employees at the Livermore lab reduces its productivity and makes it a less desirable place to work.

Lack of job security at a financially troubled facility is likely to make it far more difficult to attract the top talent that has been the foundation of the lab's success over the years.

Making matters worse, the federal government has been less than generous in funding the lab in the past few years.

With diminished funding, higher than forecast costs and a declining work force, the Livermore lab faces an uncertain future that could be a painful loss for the East Bay economy.

http://www.contracostatimes.com/opinion/ci_8989164