French Nuclear Giant Areva To Post Large Loss
PARIS (AP) â¿¿ France's state-controlled nuclear giant Areva announced plans Tuesday to cut jobs and suspend projects around the world as part of a five-year turnaround plan, aimed at returning to profit after posting a massive financial loss in 2011.
Areva's new chief executive Luc Oursel told a meeting of financial analysts that Areva plans to cut up to 1,500 jobs in Germany and has suspended a controversial nuclear enrichment plant project in Idaho in the U.S. in a bid to offset losses this year that could reach â¿¬1.6 billion ($2.12 billion).
Oursel said that the German job cuts were necessary following the German government's decision to shut down eight nuclear reactors and progressively phase out the remaining nine reactors between 2015 and 2022.Germany represents 6 percent of Areva's order book of â¿¬44 billion. Areva will not resort to mass layoffs in France but has instated a hiring freeze on support jobs such as information technology. Areva employs 8,000 people in support functions, including 6,000 in France. French support employees retiring or leaving the company for other reasons will not be replaced, Oursel said. He declined to put a figure on the number of jobs this policy could eliminate from the group's headcount. At the same time Areva is suspending a number of projects around the globe, including the Eagle Rock Enrichment Facility near Idaho Falls. Areva won a U.S. license to build and operate the planned $3 billion gas centrifuge uranium enrichment plant in Idaho in October, a key step in the company's plans to expand production of nuclear fuel in the United States. The plant would have been used to enrich uranium for use in the manufacture of nuclear fuel for commercial power reactors and was planned to be in operation by 2014. A final decision on the project had been on hold pending the review of Areva's capital investments undertaken by Oursel and his new management team. Oursel took the helm in June.
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